Analysts: Skullcandy Inc Facing Headwinds, But Clear Course

Skullcandy Inc (NASDAQ: SKUL) beat quarterly expectations recently but the shares sank 6 percent Friday, perhaps on concerns about narrower-than expected margins.The Park City, Utah-based maker of headphones closed recently at $10.43, down $0.64.Despite beating the Wall Street consensus for both earnings and revenue, "the flow-through wasn't as strong as we expected," said Piper Jaffray's Jonathan Berg, who nonetheless bumped his price target about 7 percent to $14. The company "is a brand just getting back on its feet" according to Berg, who maintained an Overweight rating and sees opportunity for growth as well as margin recovery.Foreign exchange, the West Coast port delays and RadioShack Corporation's (OTC: RSHCQ) bankruptcy will conspire to reduce 2015 earnings by $0.10 a share, Morgan Stanley's Joseph Wyatt said.Wyatt, who maintained an Equal Weight rating and $11.25 target, said Skullcandy will recoup the $14 million in sales lost in the RadioShack bankruptcy by 2016.Increased distribution through Wal-Mart Stores, Inc. (NYSE: WMT), new products and strong consumer interest in headphones for computer gaming helped Skullcandy beat fourth-quarter estimates, Wyatt said.D.A. Davidson's Andrew Burns said Skullcandy has room to boost its 2015 forecast.Burns, who maintained a Buy rating on Skullcandy, boosted his price target more than 16 percent to $14.The company has sales momentum, clean inventories and "a compelling product assortment," Burns said.