QUICKSILVER NET DIPS IN QUARTER
Byline: Evan Clark
NEW YORK — Quiksilver Inc.’s first-quarter net dropped 9.1 percent to $3.7 million, or 16 cents a share, a couple of pennies ahead of expectations, but also a couple behind year-ago results.
Following company guidance, Wall Street expected Quiksilver to earn 14 cents a share. Net income in the 1999 fourth-quarter was $4.1 million, or 18 cents a share.
Sales for the period ended Jan. 31 jumped 21.9 million to $121.8 million compared to $99.9 million a year ago.
Domestic sales for the Huntington Beach, Calif.-based firm increased 25.4 percent to $78.6 million. European sales were up 16 percent to $43.3 million. Measured in French francs, the company said sales in Europe were up 32 percent.
Spring and summer bookings gained 22 percent over a year ago.
Earnings for the quarter suffered from a “fairly flat” performance for department stores, which the company attributed to the economic climate. Quiksilver was quick to note, though, that its exposure to the department store channel is limited and still produced what was described as a “good” sell-through. At other channels, sell-through was “excellent,” the firm said.
Robert McKnight, chairman and chief executive, said in a statement that the firm’s fall lines were well received at the Magic and Action Sports Retailer trade shows and “reaction to our core Quiksilver and Roxy lines, as well as to our Hawk, Quiksilver Silver Edition, Leilani, Raisins, and Radio Fiji lines, was very positive across the board.”
Quiksilver said its young men’s business performed well during the quarter. McKnight told analysts on a conference call Wednesday that the Roxy line was strong and growing. “We think that Roxy represents a very compelling opportunity,” he said.
The ceo added, that the business will continue to see domestic comps in positive double-digit territory for “some time” to come.
The embryonic Hawk skateboard apparel line remains small in comparison to the established surf business but McKnight said, “I think it will start to become a meaningful part of our young men’s business.” The Hawk line and other newer ventures should help Quiksilver from being “completely pigeon-holed as just surf,” the firm noted on the call.
The firm said the knitwear business is very strong at Roxy, as is “anything with a collar.” Low-rise flair jeans should also continue to be big while apparel with embellishments like rhinestones and studs are “blowing out.”
For the second quarter, Quiksilver expects earnings per share to be 58 cents, in line with analyst’s expectations. Sales for the period are expected to be in the $164 million to $171 million range.
McKnight said the firm is looking for 15 percent to 20 percent top- and bottom-line growth.