What happened

Shares of Skechers USA, Inc. (NYSE:SKX) were down 23.3% as of 11:30 a.m. EDT after the footwear specialist announced mixed second-quarter 2018 results and disappointing guidance.

Quarterly revenue climbed 10.6% year over year to a company-record $1.134 billion, near the midpoint of Skechers' guidance provided last quarter for a range of $1.12 billion to $1.145 billion. But that translated to a nearly 24% decline in net earnings to $45.3 million, or $0.29 per diluted share, far below the company's expected $0.38 to $0.43 range.

Skechers storefront

Image source: Skechers.

So what

To be fair, Skechers' bottom line included a roughly $7 million headwind from foreign currency exchange, as well as around $6.2 million in legal costs during the quarter. Meanwhile, international wholesale revenue climbed a healthy 24.9%, and comparable-store sales rose 4.5% globally.

"The financial accomplishments in the second quarter are the result of our product and marketing, as well as our ongoing efforts to seek out global opportunities," stated CEO Robert Greenberg. "With the resurgence of retro looks and Skechers D'Lites, we are the originator of one of the hottest trends in footwear."

Greenberg added that the company looks forward to the lucrative back-to-school season, followed by more new styles and "impactful marketing" for the rest of the year.

Now what

Even so, Skechers anticipates third-quarter sales in the range of $1.20 billion to $1.225 billion -- or 9.3% to 11.6% growth from the same year-ago period -- which should translate to earnings per share of $0.50 to $0.55. Here again, most analysts were modeling significantly higher earnings of $0.68 per share on revenue of $1.26 billion.

In the end, Skechers may be happy with its new top-line record. But investors obviously aren't keen on the possibility that its already modest growth could decelerate in the coming quarters. So even with the stock still reeling from its first-quarter disappointment in April, it's hardly surprising to see the Skeckers shares plunging again today.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Skechers. The Motley Fool has a disclosure policy.