Volcom Inc. said first-quarter net income rose 78.5 percent, helping the action sports apparel and footwear vendor skate past Wall Street’s projections.
This story first appeared in the May 4, 2010 issue of WWD. Subscribe Today.
The Costa Mesa, Calif.-based firm posted profits of $7.5 million, or 31 cents a diluted share, for the period ended March 31, compared with income of $4.2 million, or 17 cents a share, in the year-ago quarter. Net revenues improved 13.3 percent to $77.4 million, from $68.3 million, a year earlier. Analysts polled by Yahoo anticipated earnings of 19 cents a share on revenue of $73.8 million.
Total revenue in the company’s U.S. segment, including sales from Canada, Japan, other international territories outside of Europe and branded retail stores, improved 13.7 percent to $48.2 million versus year-ago sales of $42.4 million. Revenues in Europe gained 8.8 percent, expanding to $23.6 million, compared with $21.7 million. Sales from Electric, the firm’s eyewear division, totaled $5.6 million, a 33.3 percent increase over last year’s sales of $4.2 million. Gross margin improved to 54.2 percent of sales versus 50.3 percent a year earlier.
On the company call, Richard Woolcott, Volcom’s chairman and chief executive officer, touted strong sales in key categories such as denim, boardshorts and outerwear, but admitted the junior business has been “challenged.”
“The bulk of our juniors business is still facing hurdles,” he said, adding that, coming out of the recession, the company is in “build-back mode.”
Within the next five years, he said the company’s goal is to achieve $500 million in revenue. Last year, Volcom posted sales of $280.6 million.
For the second quarter, the vendor expects per share amounts to range from a loss of 2 cents to a profit of 2 cents on net revenues of between $59 million and $62 million. Analysts are looking for earnings per share of 2 cents on sales of $59.6 million.