Don't be disappointed if the earnings aren't as positive as we'd like them to be. Remember what Oakley said about Q1 (on 2-6-97) when they announced Q4 earnings:
"While we are pleased with our overall growth for the full year, we are
obviously disappointed with our results for the fourth quarter which,
in large part, reflect declining sales and order cancellations by our
largest retailer, Sunglass Hut, together with poor holiday business for
our products at retail," said Mike Parnell, Oakley's chief executive
officer. "We expect to incur some residual impact from these
developments in the first and second quarters of 1997, but we are
working closely with Sunglass Hut management to ensure that, going
forward, appropriate inventory levels are maintained and optimal
sell-through rates are achieved."
Parnell added that Oakley has several new products under development that are slated for release at various times over the course of the year, including its new X Metal line. However, the company does not expect to realize the full benefits of any new product introductions until after the first quarter of 1997.
Right now Oakley can't keep Romeo's in stock. They'll selling like hotcakes but this product is new to the manufacturing line and they're more difficult to make than previous products. We'll probably be seeing terrific revenue from the X-metal line in Q2 and Q3, but Q1 will probably receive nominal revenue .
Also remember Sunglass Hut has/had too much Oakley inventory. Their channel was stuffed and it has been one of their primary goals to clear out the channel of older merchandise. I've spoken with several Sunglass Hut's and they've told me X-metals is the hottest thing happening now...if they could just get some.
Also remember Oakley is building and should be moving into their new corporate headquarters. This costs money.
I too hope Oakey does well when they report earnings, but won't be surprised if they're disappointing. Personally, Imd waiting for a dip after the announcement before purchasing. |
