Jefferies Remains Bullish on Skullcandy (SKUL) Ahead of Earnings But Notes Margins Come Under Pressure
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Price: $6.35 --0%
Rating Summary:
5 Buy, 8 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
5 Buy, 8 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Jefferies is reiterating its Buy rating and $22 price target on shares of Skullcandy (NASDAQ: SKUL) ahead of its third quarter results and conference call.
The company is expected to release its third quarter results tomorrow, November 3 following the closing bell. The firm currently forecasts SKUL will reported EPS of $0.13 on $50 million in sales. Jefferies estimates 30 percent growth for both domestic and international sales. The Street is looking for EPS of $0.14 on $50.62 million in sales.
The firm highlights higher COGS will result in a 5 percent decline in gross margin in Q3 and a 7 percent decline in Q4. An analyst at Jefferies comments, "We expect this trend to improve in 2012 as the company benefits from easier compares, bringing the Europe business in house, higher online sales mix and its efforts to diversify its vendor/manufacturer base."
Jefferies believes management will reaffirm its full year 2011 guidance of $208-$218 million in sales and EPS of $0.87-$0.92. The firm is maintaining its 2011 estimates, EPS of $0.89 on $216 million in sales.
During the conference call Jefferies expects management to discuss continued top-line momentum heading into the holiday season and highlight on the recently completed acquisition of its distribution agreement for Skullcandy products in Europe.
For more ratings news on Skullcandy click here and for the rating history of Skullcandy click here.
Shares of Skullcandy closed at $14.85 yesterday.
The company is expected to release its third quarter results tomorrow, November 3 following the closing bell. The firm currently forecasts SKUL will reported EPS of $0.13 on $50 million in sales. Jefferies estimates 30 percent growth for both domestic and international sales. The Street is looking for EPS of $0.14 on $50.62 million in sales.
The firm highlights higher COGS will result in a 5 percent decline in gross margin in Q3 and a 7 percent decline in Q4. An analyst at Jefferies comments, "We expect this trend to improve in 2012 as the company benefits from easier compares, bringing the Europe business in house, higher online sales mix and its efforts to diversify its vendor/manufacturer base."
Jefferies believes management will reaffirm its full year 2011 guidance of $208-$218 million in sales and EPS of $0.87-$0.92. The firm is maintaining its 2011 estimates, EPS of $0.89 on $216 million in sales.
During the conference call Jefferies expects management to discuss continued top-line momentum heading into the holiday season and highlight on the recently completed acquisition of its distribution agreement for Skullcandy products in Europe.
For more ratings news on Skullcandy click here and for the rating history of Skullcandy click here.
Shares of Skullcandy closed at $14.85 yesterday.
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