Heelys Still Warning & New Lows (HLYS)

By Douglas A. McIntyre Published Oct 24, 4:00PM EDT

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Heelys, Inc. (NASDAQ:HLYS) is being punished, again, in after-hours trading because of an earnings warning. The Company currently expects net sales for the third quarter to be approximately $49 million compared to its previous guidance range of $55 to $58 million, and earnings per diluted share for the third quarter to be in the range of $0.22 to $0.23 versus the prior expectation of $0.28 to $0.30.

These CEO comments pretty much say it all. Mike Staffaroni, President & CEP said, “Throughout the third quarter we took a number of steps to reduce the amount of inventory in our current domestic distribution channels, including increasing our national advertising and providing additional markdown assistance. While we appear to have made some important progress, the difficult retail environment over the past several months resulted in higher than anticipated order cancellations, increased promotional activity and rescheduled shipments, all of which negatively impacted our net sales and earnings. We continue to believe in the long-term prospects of our brand and products; however over the near-term, we expect that our business will remain challenging.”

It looks like the new video game inspired shoes aren’t going to help it yet. Shares are now down 10% at $7.55 in after-hours trading and it has a $7.65 to $40.09 trading range since its IPO. This looks like a new all-time low if these levels hold.

Jon C. Ogg
October 24, 2007

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.