Shortly after the Thanksgiving holiday weekend several analysts downgraded Oakley stock, citing poor sell-through of the much hyped THUMP sunglass/MP-3 player. OO shares fell 12.3% for the week to close at $12.03 on Friday evening.
Analyst Vera Van Ert at Wedbush Morgan Securities maintained the “hold” rating placed on the company, but stated in a report that a survey of 100 Circuit City stores showed fair-to-poor initial sales of the Thump. Her opinion is that consumers want the options associated with separate MP-3 players and sunglasses, and that Oakleys price tag is hampering interest.
Oakley fought back with its own press release at mid-week, stating that sales through Circuit City and Oakley retail stores have already exceeded $1 million since the November 20 release date. “We believe that Oakley THUMP has generated the highest dollar sales at retail during the first ten days of any launch in the company’s history, based on retail sales to date of Oakley THUMP as compared to other product launches in the company’s recent history,” said Oakley CEO Jim Jannard.
Based on the initial sell-in, the company reiterated that the introduction will have a significant positive effect on the company’s net sales and earnings for the fourth quarter. The company also said that it remains too early to predict long-term consumer acceptance of the THUMP, it has received a number of positive reviews by the likes of USA Today, Time, Wired and CNET.
>>> After putting so much emphasis on Thump, OO now has to hope they can show real results…
