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MANHATTAN BEACH — Shares of footwear maker Skechers USA Inc. jumped on Thursday, after the company said first-quarter profit rose, helped by tight cost control.
Shares rose $2.28, or 24.1 percent, to $11.75 during midday trading.
Skechers earnings tumbled 75 percent to $8.2 million, or 18 cents per share, from $32.8 million, or 70 cents per share, a year ago.
Revenue fell 11 percent to $343.5 million from $384.9 million a year earlier.
But the results easily topped expectations of analysts surveyed by Thomson Reuters, who had expected a loss of 9 cents a share on revenue of $333.0 million. The company said lowering inventory and cost cutting helped results.
Wedbush Morgan analyst Jeff Mintz said in a note to investors that the company's 3.1 percent year-over-year inventory reduction was better than expected.
"Although inventory did not decline as much as revenue in the first quarter, we were impressed by the rapid improvement in this metric and believe that current inventory is only slightly above an appropriate level," he wrote.
He also praised the company's tight control on expenses.
"This improved expense control is one of the primary drivers behind our increased earnings expectations for the for the remainder of 2009," he wrote.
He raised his 2009 earnings estimate to 51 cents from 31 cents per share and raised his price target to $10 from $7.
"We are remaining at a HOLD rating due to our belief that the Skechers consumer is likely to remain economically pressured by continued job losses," Mintz wrote. "We expect to get more positive on shares if our checks continue to hold up and the environment improves."
