Quiksilver revenues decline 11 percent in FY14 and Q4

REPORT_ Quiksilver has reported that for the full year of fiscal 2014 ended October 31, 2014, versus the full year of fiscal 2013, net revenues, were 1.57 billion dollars compared with 1.81 billion dollars, representing a decrease of 11 percent, or 189 million dollars, on constant currency continuing category basis. For the fourth quarter, net revenues, were 401 million dollars compared with 476 million dollars, down 11 percent, or 50 million dollars, on a constant currency continuing category basis.

“We have successfully completed the organizational restructuring of the company, with every employee now singularly focused on execution,” said Andy Mooney, Chairman and Chief Executive Officer of Quiksilver, adding, “As recently announced, the company has reached a definitive agreement to sell its majority ownership interest in Surfdome for net proceeds of approximately 16 million dollars. As a result, the company has reclassified the current and prior year operating results of Surfdome, along with its previously divested Mervin and Hawk businesses, as discontinued operations.”

During the fiscal year 2014, Americas net revenues decreased 16 percent or 135 million dollars, in EMEA, the decline was 8 percent, or 53 million dollars, net revenues in APAC were partially up 1 percent, or 2 million dollars, on constant currency continuing category basis. Gross margin increased to 48.6 percent from 48.2 percent. Pro-forma Adjusted EBITDA decreased to 39 million dollars from 118 million dollars. Net loss from continuing operations attributable to Quiksilver was 327 million dollars, or 1.92 dollars per share, compared with 239 million dollars, or 1.43 dollars per share.

Net revenues of Quiksilver brand declined 10 percent, or 68 million dollars, Roxy net revenues were down 4 percent, or 22 million dollars and net revenues of DC brand decreased 19 percent, or 99 million dollars, on a constant currency continuing category basis. Wholesale net revenues too declined 16 percent, or 199 million dollars, retail net revenues, were however slightly up 1 percent, or 5 million dollars. Same-store sales in company-owned retail stores were flat; and, E-commerce net revenues increased 12 percent, or 8 million dollars. Apparel and accessories and footwear revenues were down 10 percent and 12 percent in that order. However, net revenues from emerging markets increased 14 percent, or 25 million dollars, on a constant currency continuing category basis.

Net revenues in Americas, for the fourth quarter were down 18 percent at 172 million dollars compared with 223 million dollars. EMEA net revenues were 156 million dollars compared with 168 million dollars, showing 3 percent decline. APAC net revenues were 71 million dollars compared with 83 million dollars, down 10 percent. Gross margin decreased to 46.7 percent from 47 percent. Pro-forma Adjusted EBITDA was 11 million dollars compared with 35 million dollars. Net loss from continuing operations attributable to Quiksilver was 49 million dollars, or 0.29 dollars per share, compared with 175 million dollars, or 1.04 dollars per share.

Quiksilver net revenues were down 12 percent, or 21 million dollars, on a constant currency continuing category basis; Roxy net revenues were down 6 percent, or 9 million dollars and net revenues at DC were down 14 percent, or 18 million dollars. Wholesale net revenues, as reported, were down 14 percent and retail net revenues were down 1 percent. Same-store sales in company-owned retail stores decreased 3 percent. Company-owned retail stores totaled 683 at the end of fiscal 2014 compared with 631 at the end of fiscal 2013; and E-commerce net revenues declined 3 percent. Net revenues for apparel and accessories, footwear and emerging markets also declined 9 percent, 18 percent and 6 percent, respectively.

For the fiscal year 2015 net revenues are expected to be in the range of 1.48 billion dollars to 1.55 billion dollars, an increase of 1 percent to 5 percent on a constant currency continuing category basis versus the prior period. Gross margins are expected in the range of 49.5 percent to 51 percent and pro-forma adjusted EBITDA is expected in the range of 80 million dollars to 90 million dollars. First quarter 2015 net revenues are expected to be approximately 340 million dollars, which is a reduction of approximately 7 percent.