Skullcandy gives back gains following bearish SA articles


Though the company beat EPS estimates, Skullcandy's (SKUL -6%) Q1 report suggests its "core brands sales are in significant domestic decline," writes Charles Moscoe in a Friday evening SA column.

With U.S. sales still under pressure, Moscoe doubts the 200 bps Y/Y gross margin improvement delivered in Q1 is sustainable. He also asserts Skullcandy has only been able to maintain minimum advertised pricing for two products - Crusher and Air Raid - following many quarters of channel-stuffing.

Nonetheless, though Moscoe considers Skullcandy shares "overpriced by a significant margin," he thinks much better shorting opportunities exist.

Meanwhile, in a column released shortly before Friday's close, Stan Ackman notes international gross margin fell 320 bps Y/Y to 44.9%, even as North American GM rose 350 bps to 47%. He also expresses doubts about the impact of Skullcandy's Wal-Mart deal, given a lack of detail from management.

Shares have fully given back the Friday gains they saw in response to Skullcandy's EPS beat and solid guidance.

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Comments (1)
  • fyoface
    , contributor
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    lol like this website could affect a stock price...
    9 May 2014, 09:35 AM Reply Like
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