Shares of Quiksilver Inc. rose more than 30 percent Friday morning after the beach lifestyle firm projected a return to revenue growth in 2015.
Closing the books on a dismal 2014, during which its losses mounted $309.4 million and its shares shed 83 percent of their value, the Huntington Beach, Calif.-based owner of the Quiksilver, Roxy and DC brands said late Thursday it expects full-year revenues of $1.48 billion to $1.55 billion in the new year, which would constitute a 1 to 5 percent increase above 2014 sales at constant currency and adjusted for discontinued operations. It anticipates adjusted earnings before interest, taxes, depreciation and amortization of between $80 million and $90 million, more than twice the $39 million in adjusted ebitda recorded in 2014.
However, first-quarter expectations are more modest, with revenues expected to drop about 7 percent on a constant currency basis and adjusted ebitda to hit about $6 million, down from $16 million in the first quarter of 2014.
In the first hour of New York Stock Exchange trading, shares jumped 35 cents, or 31.1 percent, to $1.94.
“Looking at the year ahead, we are pleased with our order book for spring 2015 as it represents a stabilization of the business beginning in Q2, providing a foundation for significant ebitda growth in 2015 and top-line and incremental ebitda growth coming in 2016 and beyond,” said Andy Mooney, president and chief executive officer, on a conference call late Thursday.
With the company expected to complete the sale of its majority ownership in Surfdome to Australia’s SurfStitch Group for $16 million by the end of the calendar year, Mooney said the firm will have “successfully completed the organizational restructuring of the company, with every employee now singularly focused on execution. Despite a challenging year, we significantly reduced costs and inventory levels and are excited about our 2015 product offerings.”
He called retailers’ reactions to the spring offer “encouraging, with feedback on fall ’15 even more positive.”
Results for the fourth quarter of 2014 fell short of analysts’ muted expectations. In the three months ended Oct. 31, the company’s net loss from continuing operations was $51.6 million, or 29 cents a diluted share, down from a year-ago loss of $171.1 million, or $1.04, but worse than the 11-cent loss expected, on average, by analysts.
Revenues fell 15.8 percent to $400.7 million from $475.9 million, below the $430.4 million analysts’ consensus estimate.
On a constant currency basis, Quiksilver brand sales fell 12 percent, Roxy’s were down 6 percent and DC’s were off 14 percent.
For the full year, the $309.4 million net loss translated into $1.92 a diluted share, including $178.2 million in pretax goodwill impairment and compared to a net loss of $232.6 million, or $1.43 a share, in 2013. Revenues fell 13.3 percent to $1.57 billion from $1.81 billion.
In October, Bob McKnight, cofounder of the firm, retired as chairman of Quiksilver, with the title being added to Mooney’s.