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.