Heelys, Inc. expects net sales for the third quarter
to decrease 32.4% to $49 million from $72.5 million a year ago. This
marks a decrease from earlier guidance ranging from $55 million to $58
million. Earnings per diluted share is expected to be in the range of
22 cents to 23 cents per share versus the prior expectation of 28 cents
to 30 cents. The company also is opening two new accounts, Famous
Footwear and Shoe Carnival.
Mike Staffaroni, president and CEO of Heelys, said
“Throughout the third quarter we took a number of steps to reduce the
amount of inventory in our current domestic distribution channels,
including increasing our national advertising and providing additional
markdown assistance. While we appear to have made some important
progress, the difficult retail environment over the past several months
resulted in higher than anticipated order cancellations, increased
promotional activity and rescheduled shipments, all of which negatively
impacted our net sales and earnings. We continue to believe in the
long-term prospects of our brand and products; however over the
near-term, we expect that our business will remain challenging.”
Regarding expanding distribution to Famous Footwear
and Shoe Carnival, Staffaroni, said he expects to have product on
select shelves in time for the holiday selling period with a broader
rollout expected in 2008.
“We believe that Famous Footwear and Shoe Carnival
are both great fits for the Heelys brand, and we look forward to long
and mutually beneficial relationships with them.“
