Leaner Billabong returns to profit

Billabong has swung into the black for the first time in three years thanks to asset sales, downsizing and cost cutting.

The surf and sports clothing retailer made a $25.7 million profit in the six months to December 31, up from $126 million loss in the same period a year ago.

Despite the better than expected result, investors were not impressed, sending Billabong shares down 2.5 cents, or 3.9 per cent, to 61.5 cents.

That was likely caused by a 4.5 per cent fall in sales in its Asia Pacific business, due particularly weak sales in Australia in the leadup to Christmas.

IG Markets strategist Evan Lucas said sales disappointed and it remained unclear how the retailer would fare in the second half of the year.

"The outlook is still very muddled and dependent on how they operate in Europe," he said.
"Their Australian retail sales numbers were also weaker than they were hoping and definitely weaker than what the market was expecting."

Options Xpress market analyst Ben Le Brun said a lot of work was still needed to.... continue reading.....

By AAP through thebull.com.au

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