Labaton Sucharow Files Securities Class Action Lawsuit on Behalf of Skechers U.S.A., Inc. Investors
NEW YORK (Oct. 23, 2017) — Labaton Sucharow LLP announced that on October 20, 2017, the Firm filed a securities class action lawsuit on behalf of its client Steamfitters Local 449 Pension Plan (Steamfitters 449) against Skechers U.S.A., Inc. (Skechers) (NYSE:SKX), and certain of its senior executives (collectively, the defendants). The action, captioned Steamfitters Local 449 Pension Plan v. Skechers U.S.A, Inc., No. 17-cv-08107 (S.D.N.Y.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission (SEC) Rule 10b-5 promulgated thereunder, on behalf all persons or entities who purchased or otherwise acquired Skechers common stock between April 23, 2015 and October 22, 2015, inclusive (the class period).
Skechers designs, develops, and markets footwear for men, women, and children. The company’s primary reporting segments are: 1) Domestic Wholesale; 2) International Wholesale; and 3) Retail (which includes both domestic and international company stores). From 2013 through 2015, Domestic Wholesale was the company’s primary driver of growth and accounted for higher net sales as compared to the other two segments. The Domestic Wholesale segment accounted for approximately 39 percent of Skechers’ 2015 total net sales. Skechers’ Domestic Wholesale customers include department stores, athletic footwear retailers, and specialty shoe stores.
During the class period, Skechers repeatedly touted the strength of customer demand within the Domestic Wholesale segment, which the company claimed would spur continued sales growth. Skechers frequently emphasized that its Domestic Wholesale segment growth would continue into the second half of 2015 based on pending orders and meetings with key customers. However, the defendants’ class period statements pertaining to back-half 2015 customer demand and sales growth related thereto were materially false and misleading because the defendants failed to disclose that: 1) the company’s Domestic Wholesale customers took early receipt of fall 2015 inventory, causing them to delay receipt of and, in some cases, cancel pending orders scheduled for delivery in the second half of 2015; 2) as a result of the foregoing, the company’s Domestic Wholesale growth rate was unsustainable; and 3) the company’s positive statements about its business, operations, and prospects lacked a reasonable basis.
The company’s slowing sales growth was revealed on October 22, 2015 after the market closed, when Skechers issued a press release announcing financial results for the third quarter ended September 30, 2015, which included disappointing net sales that fell short of analysts’ consensus estimates. According to the defendants, $20 million in net sales were shifted from third quarter 2015 into second quarter 2015 due to early customer deliveries. The defendants blamed the sales miss on the company’s inability to make up this shortfall in third quarter 2015 due to a weaker-than-expected retail environment. On news of the company’s disappointing net sales and diluted earnings per share, Skechers common stock fell $14.55 per share, or 31.5 percent, to close on October 23, 2015 at $31.64 per share.
If you purchased or acquired Skechers common stock during the class period, you are a member of the “class” and may be able to seek appointment as the lead plaintiff. The lead plaintiff motion papers must be filed with the U.S. District Court for the Southern District of New York no later than December 22, 2017. The lead plaintiff is a court-appointed representative for absent members of the class. You do not need to seek appointment as the lead plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as lead plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at firstname.lastname@example.org. You can view a copy of the complaint online here.