Shares of Heelys dropped nearly 50% after warning of a weak second half in their second quarter earnings report.
For the second quarter, net sales increased 140% and net income increased 205% for 45 cents per share.
Looking ahead, the company "noted that it is experiencing challenges at retail related primarily to an over-inventoried position of product at many of the Company's domestic accounts which will have a significant adverse affect on its fourth quarter 2007 results. Based on these factors, the Company now expects net sales and net income growth of 10% - 15% in 2007 versus 2006."
Analysts were looking for 45% growth.
Previous coverage of Heelys.
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