Why is Skechers stock down today?

While the stock market in general was rising due to interest rate cuts today, Skechers (SKX -9.62%)casual footwear specialist, was moving in the opposite direction, falling after it told investors that sales in China were weaker than expected at an industry conference.

As a result, shares finished down 9.6% on the news.

Image source: Getty Images.

The fighting in China continues

Skechers is far from the only American consumer discretionary company struggling in China, as NIKE, Appleand Starbucks all reported poor results in the No. economy. 2 in the world, but investors were disappointed by the latest update.

to Wells Fargo Consumer conference, Skechers management said it faces some challenges in some Asian markets and that “China is facing some pretty severe discretionary consumer pressures.” He also called them “a little worse than anticipated” and said he was focusing on resetting his strategy.

Skechers did not provide specific guidance on the weaker conditions, but investors misinterpreted the news as meaning second-half results would be worse than expected.

China accounts for about 15 percent of its sales, and management hinted at challenges in China in its second-quarter earnings report, saying results from the June 18 shopping holiday were weaker than expected.

What’s next for Skechers

With China accounting for just 15% of the company’s revenue, investors may overreact to the news, although the company’s decision not to update guidance could lead investors to believe the impact will be particularly negative.

Skechers fared quite well in a challenging footwear industry environment, with revenue growing 7% in Q2, which should give investors confidence.

Given that the challenges in China are not specific to Skechers, this does not seem like a reason to sell the stock. Skechers should be fine in the long run.