estimated sales of athletic shoes will be released weekly. Last Q it was enough to cut the stock in half before earnings when it went down another 20%.
I'm sure there will be more of the same SportScan and analyst comments.
Fist of all...I'm not short. I'm LONG!!!! And I'm down a bundle.
My point is that this will not be like election returns or sports scores where we will be receiving constant updates. Nope. We're not going to hear anything for more than 80 days.
So comments like, "any good news and this thing will fly" is just plain stupid. If there is good news, it won't happen before the end of the year. It'll happen by the next conference call at the end of January, 2011.
Listen to the conference call. The CEO was very reluctant to come off any information, but you can be reasonably certain about this particular question. It seems a very considerable amount of inventory is shape ups. Sketchers earlier in the year reported shortages of shape ups and didn't want to have that happen again. They obviously expected a larger raise in shape ups demand than the one which occurred.
Historically they have inventory numbers of ~200-250m. Current inventory is 327m. If this inventory was in the same normal shoe/toner shoe ratio that current sales are, they could work off the excess inventory in a *very short* period. However, it isn't. That is why the CEO said that he is confident inventory levels will return to normal within 2 quarters instead of just saying 1 quarter.
I don't know specifics, but judging by the scouting I just did in the Pittsburgh area, the Shape Ups are a significant part. My wife and I each bought a pair in May. She loves them. I think they are okay. Bought them to see if they would help with knee rehab and I think they did. Anyway, we couldn't get them for less than $100 at that time, and had to hit multiple stores to find them. Both Macy's and Famous Footwear were well stocked, and FF was literally stocked to the ceilings in a couple different areas for both mens and womens. Prices on the womens were cut to $80 at both places. Older mens versions were the same, but the new ones were listed at $120 and slashed to $100. I spoke to the kid greeter at FF and he said they are selling good, but shipments are arriving all the time. None of this should be a surprise given what we know, but the problem is real for now. Lets hope they don't have to slash anymore going into the holidays. Also noticed plenty of competition for the toners. Reebok prices were around $90. I think the others were similar in price. I am long both the shoes and the stock.