NEW YORK -- Growth in Europe helped Quiksilver Inc. generate double-digit sales growth in the fourth quarter, but profits came in at less than one-quarter of year-ago levels.
For the quarter ended Oct. 31, the Huntington Beach, Calif.-based firm registered net income of $2.4 million, or 10 cents a share, 76 percent below the year-ago quarter's $9.8 million, or 42 cents. Sales were up 12.2 percent to $170.2 million from $151.6 million.
Robert McKnight Jr., chairman and chief executive officer, said in a statement that while its "strong history of earnings growth" was interrupted, the company managed to end the year "on a good note, with bookings up at a double-digit pace and inventories at a manageable level."
Domestic sales increased 4.3 percent to $101.1 million, outstripped by European sales, which posted a 21.7 percent gain over year-ago numbers when measured in U.S. dollars to $69.1 million.
Jennifer Black, an analyst at Wells Fargo Van Kasper, observed in a research note that the European operation "accounted for nearly 41 percent of total net sales for the fourth quarter." She expects that Europe will continue to be the company's primary growth vehicle, playing an important role over the next two quarters.
Joseph Teklits, an analyst at Wachovia Securities, wrote in a note that Quiksilver is well-positioned for the longer term, but could face some hurdles due to the continued softness in the overall retail environment for at least the first half of 2002. According to Teklits, excess units remain and will need to be worked off through the discount channels over the next couple quarters.
For the year, income slipped 12 percent to $28 million, or $1.17 a share, from $31.8 million, or $1.37, last year. Sales rose 19.3 percent to 615.4 million from $515.69 million. Domestic sales jumped 17.6 percent for the year to $391.6 million, while European sales rose 22.6 percent in U.S. dollars to $223.9 million.
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