Business news :Quiksilver Reports Decline at 2 of 3 Brands in First Quarter

Quiksilver, which unveiled extensive changes in its corporate suite this week, reported a net loss of $30 million in the first quarter ended Jan. 31, when net revenues dipped 3 percent in currency neutral terms to $431 million.

“During the first quarter, we took a number of steps supporting our three core strategies of strengthening our brands, increasing sales and driving operating efficiencies,” said Andy Mooney, President and Chief Executive Officer of Quiksilver, Inc. “We are revising our global organizational structure and transitioning toward global core processes led by experienced senior executives. We appointed heads of global supply chain, global footwear design and global apparel design, and we are actively recruiting a chief marketing officer. In addition, we made decisions to better focus the product line breadth of our three core global brands. We believe these actions will help lay the foundation for improved operating results.

“Net revenues in the first quarter were impacted by the closure of underperforming retail stores over the last year, as well as disappointing performances in our wholesale channel and in the Americas region,” continued Mooney. “On the positive side, we saw continued growth in our emerging markets and e-commerce channel, a modest improvement in gross margin and lower operating expenses.”

The company reported that Americas net revenues decreased 9 percent to $186 million from $205 million, and were down 9 percent in constant currency. EMEA net revenues increased 1 percent to $171 million from $169 million, and were up 2 percent in constant currency. APAC net revenues decreased 2 percent to $73 million from $75 million, and were down 1 percent in constant currency.

Broken down by brand, revenues declined 7 percent in currency-neutral (c-n) terms to $179 million at Quiksilver, declined 7 percent to $115 million at Roxy and were up 1 percent to $109 million at DC. The Wholesale business was down 8 percent to $268 million; Retail was down 1 percent to $129 million. First quarter same store sales in company-owned retail stores decreased 1 percent on a global basis; and, E-commerce was up 39 percent to $33 million.

Gross margin increased to 30 basis points to 51.0 percent of net revenues, primarily driven by a net revenue mix shift toward our more profitable segments and distribution channels. The Americas segment and the wholesale distribution channel, which experienced the largest percentage decreases in net revenues, typically have lower gross margins compared to the company’s other segments and channels.

SG&A decreased to $225 million compared with $230 million, primarily due to the company’s ongoing expense reduction efforts which resulted in savings across several expense categories. These savings were partially offset by a $4 million increase in e-commerce expenses associated with the continuing growth of the company’s online business.

Pro-forma loss, which excludes restructuring charges and asset impairments, net of tax, was $26 million and $20 million, or $0.16 per share and $0.12 per share, respectively. Pro-forma Adjusted EBITDA was $13 million compared with $20 million, with the decline largely driven by the $5 million change in foreign currency loss noted above.

Full report from quiksilver : quiksilver inc finqncial results .

( Source Quiksilver through SportsOneSource )

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