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
Fool contributor Ryan Fuhrmann is long shares of Nike but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.