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Quiksilver writes a loss over late deliveries

It apparently needs more time to get board sports company Quiksilver back riding the peak. For its third quarter ended July 31, the California-based company suffered sales declines for all brands and regions as far as continuing operations are concerned. Net sales declined by 19 percent to $396 million over last year’s third quarter. In the Americas, revenues fell by 27 percent (in constant currencies by 26 percent) to $191 million. In Europe, the Middle East and Africa (EMEA), sales were down by 13 (16) percent to $143 million, while the drop in sales was the smallest in Asia-Pacific at -2 (+1) percent to $62 million.

Retail better than wholesale

By brand – in constant currencies – footwear brand DC went down to $109 million, corresponding to a drop of 34 percent. Roxy slipped by 9 percent to $119 million and Quiksilver itself by 17 percent to $143 million. By distribution channel, wholesale was not satisfactory in constant currencies and went down to $235 million (-30 percent). Own retail development looked more promising: Brick-and-mortar operations went up both in effect and on a like-for-like basis by 1 percent to $123 million. The number of corporate stores grew by 26 to 658 worldwide compared with the end of the third quarter of last year. Online revenues improved by 10 percent to $35 million.

Gross margin dipped by 1.3 percentage points to 47.8 percent, mainly due to required wholesale discounts in various regions. The net loss was $220 million for continuing operations after a small profit at $0.2 million in the prior year. Earnings (Ebitda) sank to zero after $53 million twelve months before.

We are resolving the product delivery issues and already see improved fulfillment in the Holiday season. We continued to right-size staffing and redeployed our marketing to invest more in media and point of sale.”

Andy Mooney, President and CEO, Quiksilver

As expected by management, wholesale business suffered substantially in North America and Europe and was impacted by delayed deliveries, partly due to a transition to a global demand planning.

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