Shares of Costa Mesa-based Volcom Inc. slumped Friday, a day after the clothing maker warned Wall Street of a projected profit shortfall for the current quarter.
Volcom’s shares were off about 10% in afternoon New York trading on a market value of $415 million.
The company, which makes clothes inspired by surfing, skateboarding, snowboarding, music and art, said it expects a fourth-quarter profit of $988,000 to $1.7 million, which would be down by half or more from a year earlier.
Analysts on average had been expecting a fourth-quarter profit of $2.7 million.
Volcom projected fourth-quarter sales of $76 million to $79 million, which would be up about 15% from a year earlier.
Analysts had been expecting fourth-quarter sales of $72.7 million.
Volcom’s profits are set to be hit by blowout sales of unsold clothes, discounts for retailers that order clothes early and higher returns, according to analyst Mitch Kummetz of Milwaukee-based investment bank Robert W. Baird & Co.
Volcom’s forecast came on the heels of its third-quarter results, which exceeded what analysts were looking for on average.
The company reported a third-quarter profit of $13.1 million, flat from a year earlier and ahead of the $12.8 million Wall Street was looking for.
Sales came in at $104.7 million, up 11% from a year earlier and topping the $104.2 million expected by analysts.
