Shares of Volcom Inc. fell 15.5 percent Friday, a day after the firm’s second-quarter earnings fell 92 percent and missed analysts’ estimates by 5 cents.
The action sports apparel marketer said income for the three months ended June 30 was $68,000, or zero cents a diluted share, compared with $872,000, or 4 cents, in the year-ago quarter. Analysts had expected EPS of 5 cents for the three months, according to Yahoo Finance.
Total revenues rose 15.4 percent to $62.5 million from $54.2 million, which included a 15.5 percent gain in sales to $62.1 million from $53.8 million. The balance of revenues was from licensing income. U.S. revenues, which includes Canada, Japan and other regions outside of Europe as well as company branded stores, rose 16.5 percent to $50.8 million from $43.7 million. European sales declined 13 percent to $5.1 million from $5.9 million. Revenues from Volcom’s Electric brand rose 40.5 percent to $6.6 million from $4.7 million.
Richard Woolcott, chairman and chief executive officer, said that the firm’s business in the quarter was line with the company’s plan. “The strength of the Volcom and Electric brands is clearly evident, and there is good momentum underway,” he said. “Our teams are working hard to maximize every opportunity and align the company to continue to gain market share.”
Cutting into the bottom line was a 17.4 percent increase in cost of goods sold, to $32.7 million, and a 15.1 percent increase in selling, general and administrative expenses, to $29.8 million.
For the six months, income jumped 49.3 percent to $7.6 million, or 31 cents a diluted share, from $5.1 million, or 21 cents, in the year-ago period. Total revenues were up 14.2 percent to $140 million from $122.5 million.
At the end of the quarter, the company had cash and cash equivalents of $110 million, with no long-term debt. Earlier this month, the retailer said it inked a deal to acquire its Australian licensee Volcom Australia for undisclosed terms. The purchase is expected to close in the third quarter.
The Costa Mesa, Calif.-based firm said it expects third-quarter consolidated revenues of between $102 million and $105 million, and diluted EPS in the range of 47 cents to 51 cents.
Shares closed Friday at $16.27, down $2.98.