UPDATE 2-Heelys posts surprise Q4 loss, shares fall

(Recasts, adds details, conference call details, share movement)

March 4 (Reuters) - Heelys Inc (HLYS.O: Quote, Profile, Research), which makes novelty sneakers that double as roller-skates, posted a surprise fourth-quarter loss as it took higher markdowns to bring down inventory levels.

The stock, which has lost three-quarters of its value since August after it forecast a weak second-half for 2007 citing excess inventory, was down 6 percent in trading after the bell.

"As a result of the challenging retail and economic environment and general uncertainty in the marketplace, retailers are being much more cautious with their future orders," Chief Financial Officer Michael Hessong said in a conference call.

In a preview note dated Feb. 28, Brean Murray Carret & Co analyst David Meyer said, "We believe that the combination of remaining excess retail inventory coupled with the recent loss of a major customer (Dick's Sporting Goods (DKS.N: Quote, Profile, Research)) could further depress 2008 results."

The Carrollton, Texas-based company reported net loss of $5.5 million, or 20 cents a share, compared with net income of $11.5 million, or 44 cents a share, a year ago.

Excluding the impact of an increase in reserves and other charges, the company reported a net loss of 4 cents a share.

Sales fell 86 percent to $9.8 million. Excluding the impact of an increase in its reserves for returns and for marketing, sales were $15.5 million.

Analysts on average expected the company to break even, excluding exceptional items, on revenue of $14.8 million, according to Reuters Estimates. (Reporting by Neetha Mahadevan in Bangalore; Editing by Jarshad Kakkrakandy, Himani Sarkar)