Business is likely going to be tough before it gets any better for Quiksilver Inc.
The Huntington Beach, Calif.-based action sports apparel maker and retailer today released results of its fiscal year ended Oct. 31 in which it reported another challenging year for the business.
Net revenue totaled $1.35 billion for the 12 months ended in October, down about 14 percent from the year-ago period. The company’s net loss, though narrowed from a year earlier, totaled $306.17 million and marked its fifth consecutive year in the red.
The challenges continue to stack up as the movement online persists, with the company citing in its annual report e-commerce competitors such as Amazon for its Americas region and Taobao in China.
Management went on to say in the report that net revenue and gross margin over the next few quarters will likely continue to be “unfavorable,” attributing the expected performance on exchange rates, delivery delays and a changing distribution strategy.
About two years ago, the company under former chief executive officer Andy Mooney had embarked on what he coined the Multi-Year Turnaround which focused on wringing out operational efficiencies along with a focus on growing the company’s three core brands — Quiksilver, Roxy and DC Shoes. All three of those brands saw net revenue declines in fiscal year 2015.
Quiksilver, which filed for bankruptcy protection in September, will present its reorganization plan to a Delaware court judge at a hearing scheduled for Thursday. Also before the judge during the hearing is a motion by Oaktree Capital Management on the decline in Quiksilver’s valuation, which became a sticking point late last year. Oaktree, which agreed to provide as much as $175 million in debtor-in-possession financing to Quiksilver, argued the company’s value had slid since its bankruptcy filing and the strife was sent to a mediator earlier this year.
Research from Peter J. Solomon Co. last year pegged the company’s enterprise value as being between $499 million and $602 million.