Vans Shares Fall on 84 Percent Decline in Fiscal 2nd-Qtr Profit
By Anna Dubrovsky
Santa Fe Springs, California, Dec. 20 (Bloomberg) -- Vans Inc. shares fell as much as 25 percent after the maker and retailer of athletic footwear said fiscal second-quarter profit fell 84 percent and profit in the second half will miss estimates.
Vans fell $2.40, or 17 percent, to $11.58 in late morning trading of 4 million shares, 16 times the three-month daily average. Earlier the shares touched $10.45. They had fallen 17 percent this year.
Net income in the quarter ended Dec. 1 fell to $513,000, or 3 cents a share, from $3.2 million, or 21 cents, in the year-earlier quarter, the company said. Sales fell 8.3 percent to $68.3 million from $74.5 million.
Consumers are trimming spending in the recession, and retailers such as Santa Fe Springs, California-based Vans are taking profit-eroding price cuts to attract shoppers.
Same-store sales, or sales at stores open at least a year, declined 8.9 percent after 27 straight quarters of increases, the company said. Same-store sales are an important retail indicator because they exclude results from new or closed locations.
Forecast
``The combination of lower-than-expected sales and margin pressure in our retail stores and an especially promotional retail environment as a whole has prompted us to revise our guidance for the balance of the fiscal year,'' Chief Executive Officer Gary Schoenfeld said in a statement.
Net income in the third quarter will be 2 cents to 4 cents, less than the 21-cent average estimate of seven analysts surveyed by Thomson Financial/First Call. Vans said it will break even or be ``modestly profitable'' in the fourth quarter. It was expected to earn 17 cents.
Analysts at Wachovia Securities Inc. and Banc of America Securities downgraded the stock today.
The number of shares outstanding rose 22 percent to 18.3 million from 15 million a year earlier.
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