- Though it beat Q4 estimates, Skullcandy (SKUL -3.3%) guided on its CC (transcript) for Q1 revenue of $42.6M-$43.4M and EPS of -$0.12 to -$0.14, mostly below a consensus of $43.3M and -$0.08. On the other hand, full-year guidance of $272.6M-$277.5M and $0.36-$0.40 is mostly above a consensus of $259M and $0.37.
- One-timed items, forex, inventory write-offs, and a short-term air freight issue are expected to have a $0.04 impact on Q1 (and thus full-year) EPS. Forex and RadioShack's bankruptcy will impact full-year sales - RadioShack accounted for over $14M of Skullcandy's 2014 sales.
- U.S. sales rose 37% Y/Y in Q4 to $70.6M; international sales rose 27% to $26.3M. Gaming headset, Bluetooth headphone, and Wal-Mart demand were key growth drivers. Canada and China drove international growth. Over-ear products were 54% of revenue, in-ear products 40%, and speakers/accessories 6%.
- In spite of the sales growth, gross margin fell 20 bps Y/Y to 43.3% thanks to higher freight charges and a mix shift towards lower-margin gaming and wireless speaker products; Skullcandy expects a "low 44%" 2015 GM (compares with 2014's 44.6%). SG&A spend was 32.1% of revenue, down from 35.9% a year earlier.
- High expectations: Going into earnings, shares had risen 25% from the time of Skullcandy's Nov. 5 Q3 beat.
- Q4 results, PR
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