NEW YORK, NY / ACCESSWIRE / September 21, 2018 / Skechers shares closed in the red yesterday as an analyst with Cowen & Co. lowered his rating on the company to “market perform.” Shares of Under Armour were soaring higher on news that the company is slashing roughly 3% of its workforce.
RDI Initiates Coverage on:
Skechers U.S.A., Inc.
Under Armour, Inc.
Skechers U.S.A., Inc. shares were down 4.53% yesterday on about 6.5 million shares traded. The stock saw trading volume nearly double compared to usual. Shares took a tumble after a Cowen & Co. analyst downgraded the stock. Analyst John Kernan of the firm lowered his rating on Skechers shares from "outperform" to "market perform" and cited inventory pressure, slowing sales, and currency headwinds. In his note to the investor, the analyst noted Skechers’ inventories growing 23.0% during the second quarter and its inventory turnover being its lowest level in ten years. The analyst also added that over the last year, Skechers has suffered a 20% drop in desktop traffic and 14% drop in mobile traffic. Company-owned stores in North America have posted negative quarter-to-date same-store sales, the analyst said. Cowen has cut its price target on Skechers to $28 from $32. In more positive news, Skechers has donated 15,000 pairs of new shoes to children in Puerto Rico. The donation is part of the Company’s BOBS from Skechers philanthropic shoe program. “Recovery from hurricanes is not a sprint, it’s a marathon – and much work still needs to be done in Puerto Rico,” said Michael Greenberg, president of Skechers. “We saw this with power taking nearly a year to be completely restored to the island, and we’re seeing it in the families still putting their lives back together today. It’s crucial that we continue to distribute supplies to families in cities as well as more remote regions to let them know that they haven’t been forgotten. And with residents just beginning to assess the damage from Hurricane Florence, our outreach continues as we expect to be in the Carolinas in the coming months to help those impacted in that region as well.”
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Under Armour, Inc. shares closed up a little over 5% on roughly 5.5 million shares traded. The athletic apparel retailer announced that it is slashing 400 jobs around the world as it cuts costs to combat weak sales of its products. Cutting these jobs would be a reduction of the company's workforce by about 3%. The workforce reduction is expected to be completed by the end of next March. Spokeswoman Kelley McCormick said in an email that the job cuts affect "roughly" 400 employees of the company. According to the company's annual report, Under Armour has 15,800 employees as of December 31st. CFO David Bergman said, "In our relentless pursuit of running a more operationally excellent company, we continue to make difficult decisions to ensure we are best positioned to succeed. He added, "This redesign will help simplify the organization for smarter, faster execution, capture additional cost efficiencies, and shift resources to drive greater operating leverage as we move into 2019 and beyond."
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