Domestic firms with international operations have best been able to withstand rising home foreclosures and other inflationary trends that are putting a serious dent in personal pocketbooks. Footwear firm K-Swiss
International sales grew a modest 2.1% for the quarter but didn't prove sufficient in offsetting a 33.6% plummet in domestic sales, which sent the overall top line down 16% to $102.9 million and earnings down by more than half to $0.20. The difficulties here at home are no surprise to those who have been following K-Swiss for a while now, but the global trends look to be petering out. In the words of the company's president: "Based on initial indications in our futures orders, the long-term momentum we have enjoyed internationally appears to be coming to an end." As with footwear and apparel behemoth Nike
Challenges on the sales front caused management to update guidance: It now expects full-year sales of $305 million-$330 million and earnings of just $0.05-$0.25. That's admittedly quite a big range and leaves enough wiggle room to come close to what the market is expecting -- if it hits the high end of its targets. But as it stands currently, profit trends at K-Swiss are wearing thin and at risk of falling into the red for 2008.
This is in stark contrast to rivals such as Nike, Wolverine World Wide