Bank of America Expects Strong 4Q11 for Skullcandy

According to a research report published today, Bank of America has high hopes for Skullcandy Inc.'s

4Q11 earnings as stores remain strong in core categories. In the report, Bank of America commented, “We continue to see upside potential to 4Q11 as store checks indicate that trends remain strong in core SKUL categories at key retailers with out-of-stocks in SKUL's highest volume/margin product (Ink'd). In addition, we believe SKUL's online/Int'l continue to outpace total sales, with 4Q11 benefitting from bringing Europe (in-house) (vs. half 3Q). SKUL's 4Q11 GM could also benefit from a mix shift to Int'l/online as well as improved inventory management (expect sequential improvement from 3Q to 4Q).” Bank of America maintains its Buy rating and $22 PT on Skullcandy, which closed yesterday at $13.98.