Skullcandy Inc (SKUL) Down 31.65% After Cutting Fourth Quarter Guidance


Shareholders of Skullcandy Inc (NASDAQ:SKUL) are not too happy today after the company announced a cut in its fourth quarter guidance.

The company originally had expected EPS to come in at between $0.38 and $0.40 per share, but because of less than expected holiday sales numbers, they have updated these expectations to the downside. They now foresee earnings coming in at just around $0.20 – $0.22 per share. These updated figures fall well short of their previous guidance, as well as Analysts’ estimates of $0.37 per share.

Undoubtedly this comes as a surprise for investors of Skullcandy Inc (NASDAQ:SKUL), a surprise not all that welcomed.

“We are disappointed that our strong sell-through performances could not overcome the softness in the U.S. audio headphone market which was unexpectedly down in the fourth quarter,” explained Skullcandy (SKUL) President and CEO Hoby Darling This headwind, as well as aggressive promotional activity by our competitors, negatively affected our replenishment business for Skullcandy branded products contributing to the majority of our revenue miss, combined with a product mix shift that negatively weighed on gross margins.”The stock is down 31.65% or $1.44 following the news, hitting $3.11 per share. About 2.30M shares traded hands or 632.50% up from the average. SKUL has declined 39.89% since June 8, 2015 and is downtrending. It has underperformed the S&P500 by 32.41%.

From a total of 6 analysts covering Skullcandy (NASDAQ:SKUL) stock, 5 rate it a “Buy”, 0 a “Sell”, and 1 a “Hold”. This means that 83% of the ratings are positive. The highest target price is $13 while the lowest target price is $5.5. The mean of all analyst targets is $7.58 which is 143.73% above today’s ($3.11) stock price. Skullcandy was the topic of 10 analyst reports since August 9, 2015 according to the firm StockzIntelligence Inc. TH Capital maintained shares on January 12 with a “Buy” rating. DA Davidson maintained SKUL stock in a recent report from January 5 with a “Buy” rating. Finally, Jefferies downgraded the stock to a “Hold” rating in a report they issued on a November 6.

The institutional sentiment decreased to 0.78 in Q2 2015. It’s down 0.32, from 1.1 in 2015Q2. The ratio fall, as 18 funds sold all their Skullcandy Inc shares they owned while 33 reduced their positions. 7 funds bought stakes while 33 increased their total positions. Institutions now own 17.79 million shares which is 7.35% less than the previous share count of 19.20 million in 2015Q2.

Lyon Street Capital Llc holds 1.86% of its total portfolio in Skullcandy Inc, equating to 462,633 shares. 1492 Capital Management Llc owns 451,692 shares representing 1.78% of their total US portfolio. Moreover, Armistice Capital Llc has 1.61% of their total portfolio invested in the company, equating to 854,000 shares. The Ohio-based Winslow Asset Management Inc has a total of 0.75% of their portfolio invested in the stock. Thomson Horstmann & Bryant Inc, a Connecticut-based fund reported 603,840 shares owned.

Since September 10, 2015, the stock had 0 insider buys, and 8 sales for a total of $1.68 million in net activity. Ptarmagin – Llc sold 37,500 shares worth $212,625. Alden Rick sold 25,000 shares worth $143,250.

Skullcandy, Inc. is a designer, marketer and distributer of audio and gaming headphones, earbuds, speakers and other accessories under the Skullcandy, Astro Gaming and 2XL brands. The company has a market cap of $132.09 million. The Company’s products are sold and distributed through a variety of channels in the United States and approximately 80 countries across the world. It has 12.72 P/E ratio. The Firm offers an array of styles and price points and includes audio products and categories, such as gaming and sports performance, women’s and Wireless offerings, as well as partnerships with manufacturers to license its brand.