First-quarter profits at Volcom Inc. dropped by more than half.
This story first appeared in the May 5, 2009 issue of WWD. Subscribe Today.
The board-sports apparel maker beat Wall Street estimates, but tried to manage expectations for the current quarter.
In the three months ended March 31, profits at the Costa Mesa, Calif.-based firm declined 54.8 percent to $4.2 million, or 17 cents a diluted share, from $9.3 million, or 38 cents a share, a year ago.
Sales in the quarter fell 15.1 percent to $67.9 million from $80 million in the comparable period.
On average, analysts polled by Yahoo Finance had estimated earnings per share of 13 cents on revenues of $63.4 million.
Volcom’s sales in the United States, Canada and Japan fell 13.8 percent to $42.4 million in the quarter, matched by a 13.8 percent drop in European business to $21.7 million. Sales in the Electric eyewear unit fell 31.6 percent to $4.2 million.
On a conference call with investors Thursday, chairman and chief executive officer Richard Woolcott said the first quarter was better than the company had expected but that there might be something of a “revenue void” in the current quarter.
“Now that we are in Q2, we are experiencing the full effects of last year’s financial meltdown,” Woolcott said. “For Volcom, we are viewing [the second quarter] somewhat as a transition quarter where several elements come to play.”
He added many retailers were at a standstill when it came to prebooking summer orders last October and November at the height of the financial crisis and many are now booking this year’s back-to-school orders later in the summer. He said he thought the firm could make up the revenues in the second half of the year.
The company said it expects second-quarter results to range between a 3 cent loss or breakeven on a per share basis on revenues between $47 million and $50 million.