Volcom Inc. on Thursday reported a net loss in the fourth quarter, missing analysts’ expectations, and the economic downturn also led to a first-quarter earnings forecast below Wall Street’s estimates.
In addition, the surf-and-skate apparel maker reported cutting its domestic workforce by about 8 percent, affecting 28 employees; reducing executive salaries, and suspending the policy of providing annual guidance.
For the quarter ended Dec. 31, the Costa Mesa, Calif.-based firm reported a net loss of $8.7 million, or 36 cents a diluted share, versus net income of $7.1 million, or 29 cents, for the year-ago period. Excluding a $6.2 million pretax impairment charge and other nonrecurring items, the company had net income of $3.3 million, or 14 cents a diluted share, 2 cents below the 16-cent average estimate of analysts polled by Yahoo Finance. Revenue grew 0.8 percent to $69.6 million, ahead of the $68.5 million consensus estimate and 0.8 percent above the $69.1 million registered in last year’s quarter.
Quarterly gross margin improved to 44.4 percent of sales from 43.4 percent in the prior-year period.
“None of us could have ever imagined the landscape deteriorating the way that it has from just a year ago,” chairman and chief executive officer Richard Woolcott said during a conference call. “However, this is our new reality and we must adjust and manage our business accordingly. This said, our results for the fourth quarter were not acceptable.”
In addition to the impairment charge, Woolcott attributed the company’s weaker results to the highly promotional environment and currency devaluation in Canada, which generated a foreign currency loss of $1.4 million, or 4 cents a share. Escalating costs also played a role, as selling, general and administrative expenses soared 37.3 percent to $26.5 million.
Included in salary reductions is a 15 percent cut in ceo compensation and a 10 percent rollback for the remainder of senior executives.
Volcom has invested in marketing initiatives, such as promotional events with rock bands, and said it has seen positive results.
For the year, profit fell 34.9 percent to $21.7 million, or 89 cents, versus $33.3 million, or $1.37, last year. Sales increased 24.5 percent to $334.3 million from $268.6 million.
In the first quarter, the company expects earnings in the range of 13 cents and 16 cents a share on revenues of between $62 million and $65 million. Analysts expected earnings per share of 26 cents on sales of $75.4 million.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast