Quiksilver announces results for third fiscal quarter
Revenues Increase to $512.4 Million, Up 8% in Constant Currency
Surfersvillage Global Surf News, 7 September, 2012 : - - 'During the quarter, we continued to make solid progress on our three long-term initiatives, which are strengthening our brands, expanding our business and driving operational efficiencies throughout the business,' said Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc.
“From a brand perspective, we launched integrated social media marketing campaigns, hosted the premier skate tour in the industry and had outstanding team-rider success in surfing,” continued McKnight. “From a growth standpoint, our business performed admirably. DC posted sales growth of 16% and e-commerce sales more than doubled. European sales grew modestly, which positions us well compared with our peers. In the area of operational efficiencies, we made tough decisions during the quarter regarding SG&A, including effecting staff eliminations in all our regions, as well as reductions in other operating expenses.
Also, after implementing our new ERP system in the Americas in the second quarter, we kicked off our European ERP rollout in the third quarter, which will drive efficiencies by helping to integrate our operations and standardize our business processes globally. I applaud our team’s tenacity during this time of transformation and believe we are focusing on the right actions to strengthen our business and drive sustainable value.”
Fiscal Third Quarter Review:
All comparisons are between the third quarter of fiscal 2012 and the third quarter of fiscal 2011. A reconciliation of GAAP results to pro-forma results is provided in the accompanying tables.
Revenues grew 2% to $512.4 million compared with $503.3 million, and grew 8%, or $38 million, in constant currency.
•Americas revenue increased 10% to $286.1 million from $260.2 million, and was up 12% in constant currency.
•Europe revenue decreased 13% to $154.1 million from $176.4 million, and was up modestly in constant currency.
•Asia Pacific revenue increased 9% to $71.6 million from $65.5 million, and was up 13% in constant currency.
Please refer to the accompanying tables to better understand the impact of foreign currency exchange rates on revenue trends.
Gross margin was 49.5% of net revenues compared with 50.7% in the prior year period, primarily driven by lower gross margins in Europe due to higher levels of discounting and unfavorable currency exchange rate comparisons. SG&A increased to $225.8 million compared with $221.2 million, up 10 basis points as a percentage of sales, primarily driven by $3.9 million of costs associated with staff eliminations and restructuring.
Pro-forma Adjusted EBITDA was $51.2 million compared with $52.7 million, with the decline largely driven by the contraction in gross margin mentioned above. Net income was $12.6 million, or $0.07 per diluted share, compared with net income of $10.4 million, or $0.06 per diluted share. Pro-forma income, which excludes $3.8 million of net after-tax restructuring charges and asset impairments, was $16.4 million, or $0.09 per diluted share, compared with pro-forma income of $10.4 million, or $0.06 per diluted share.
Fiscal 2012 Q3 Revenue Highlights:
Revenues increased (in constant currency) across all three brands, all three regions, and all three distribution channels compared with the third quarter of fiscal 2011. Strong revenue growth continued in the company’s emerging markets, including Brazil, Russia and Indonesia.
Brands (constant currency):
• Quiksilver was up 3.5% to $193.5 million;
• Roxy increased 4.6% to $131.8 million; and,
• DC was up 15.5% to $168.2 million.
Distribution channels (constant currency):
• Wholesale business was up 4.5% to $370.0 million;
• Retail was up 6.8% to $119.3 million. Third quarter same store sales in company-owned retail stores grew 4.0% on a global basis; and,
• E-commerce was up 180.2% to $23.2 million.
Read the full Q3 Highlights
Athor: The Editors
Tags: Quiksilver, Third Quarter Results 2012, Business Updates