Oakley Puts Blame on New Shoes for Earnings Stumble

Sunglasses maker Oakley Inc. said Wednesday that it expects fourth-quarter earnings to fall as much as 38% below analysts’ projections because of sluggish sales of the company’s new athletic footwear.

The Foothill Ranch company said earnings for the quarter ended Dec. 31 likely will be 5 cents a share or about $3.5 million, about even with last year’s results.

However, that would be far short of the 8-cents-a-share consensus estimate of a group of analysts who follow the company.

Sales for the quarter are expected to rise about 15% to 20%, to between $52 million and $54 million, from $45 million in the same 1997 period.

Chief Executive Link Newcomb said in a statement that footwear sales have “not yet met the company’s expectations.”

“Preliminary fourth-quarter footwear sales of $1.7 million were affected by softness in the U.S. athletic footwear market and slower-than-anticipated acceptance of our limited product offering,” Newcomb said. “As a result, the infrastructure investments we’ve made to support this effort have yet to generate positive returns.”

The company said its main sunglass business was strong during the holiday season and that its new wristwatch generated December sales of about $2.4 million.

Oakley launched an eye-catching yellow-and-black high-top shoe last June. The shoe, which is not sport-specific, sells for about $125 a pair. The company added a low-top version and more colors later in the year.

Oakley made the earnings announcement after the stock markets’ closed Wednesday. Its shares fell 19 cents, to $9.25, in New York Stock Exchange trading.

The company plans to report final fourth quarter and year-end results Feb. 16.