K-Swiss raises guidance due to acquisition

WESTLAKE VILLAGE, Calif. - Athletic footwear maker K-Swiss Inc. on Wednesday raised its full-year guidance due to an acquisition, but said its business is deteriorating due to uncertainty caused by problems in the credit markets and the likelihood of a recession.

K-Swiss, which bought French shoe maker Palladium SAS in July, expects full-year earnings of 60 cents to 85 cents per share on revenue of $329 million to $344 million.

In July, the company said it expected earnings between 50 cents and 65 cents per share on revenue of $300 million to $320 million.

Analysts polled by Thomson Reuters, on average, predict a profit of 5 cents per share on revenue of $317.3 million.

For the fourth quarter, the company expects a loss of 10 cents per share to 35 cents per share on revenue of $45 million to $60 million.

Analysts expect a loss of 19 cents per share on revenue of $56.4 million.

K-Swiss said its guidance reflects a "significant decline" in domestic revenue , investments in product development and marketing, a slow down of international operations and investment in its Royal Elastics brand.

"Excluding Palladium, our financial results and backlog confirm the deteriorating global outlook for K-Swiss in 2008 and 2009," said Steven Nichols, chairman and president, in a statement.

"We are making headway in interesting areas with our branding initiatives and product development, but the uncertainty caused by the credit markets disruption and likely recession present substantial challenges," he said.

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