Shares in Athlete’s Foot owner RCG Corporation were hammered after the shoe retailer reported below expectations sales and cut profit guidance for the second time this year.
A short time go, the shares were down 20% to $0.662.
The company, with 400 stores and 10 retail banners including Skechers, Vans and Doc Martens, says trading conditions since it last reported in February have continued to be challenging.
And sales for the months of March and April fell short of management’s expectations.
“The market remains volatile and unpredictable and this makes forecasting future performance extremely difficult,” the company said in market update.
“Notwithstanding this, management expects trading conditions to continue to improve.”
However, the company revised down, for second time this year, its full-year underlying EBITDA (earnings before interest, tax, depreciation and amortisation) guidance to a range of $74 million to $80 million. Before February the company had been expecting $90 million.
The board of directors says RCG has been caught up in the widespread sell down of retail stocks over the last few months.
The company says the factors contributing to this include declining consumer confidence, subdued wage growth, concerns surrounding the housing market, increasing interest rates and the perceived impact that the market entry of Amazon may have on the Australian retail landscape.
In 2015, RCG bought the Accent Group, the exclusive distributor of Vans, Skechers, Dr Martens, Timberland, Stance, K Swiss, Stance and Palladium brands in Australia and New Zealand.
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