Quiksilver Q3 revenues decline, announces corrective measures

REPORT_ Quiksilver net revenues for the third quarter were 396

million dollars compared with 488 million dollars, representing a decline of 19 percent, or 96 million dollars, in constant currency. Americas net revenues decreased 27 percent to 191 million dollars from 261 million dollars, and were down 26 percent in constant currency. EMEA net revenues decreased 13 percent to 143 million dollars from 164 million dollars, and were down 16 percent in constant currency. APAC net revenues decreased 2 percent to 62 million dollars from 63 million dollars, but were up 1 percent in constant currency.

“We continued to execute against the key initiatives laid out in our profit improvement plan and to drive growth in our direct to consumer channels and emerging markets,” said Andy Mooney, President and Chief Executive Officer of Quiksilver, adding, “We are resolving the product delivery issues. We continued to right-size staffing, redeployed our marketing to invest more in media and point of sale, improved the quality of distribution in North America and completed a number of licensing transactions for peripheral product categories.”

Gross margin decreased to 47.8 percent. The 130 basis point decline in gross margin reflects increased discounting in the wholesale channels of certain regions, partially offset by sales growth in our higher-margin direct to consumer channels. Pro-forma Adjusted EBITDA decreased to zero from 53 million dollars. Net loss from continuing operations attributable to Quiksilver was 220 million dollars, or 1.29 dollars per share.

Net revenues of Quiksilver brand decreased 17 percent, at Roxy 9 percent, and DC, 34 percent. Wholesale revenues decreased 30 percent to 235 million dollars. Retail revenues increased 1 percent to 123 million dollars. Same-store sales in company-owned retail stores improved 1 percent. Company-owned retail stores totaled 658 at the end of the fiscal 2014 third quarter compared with 632 at the end of the fiscal 2013 third quarter. E-commerce revenues grew 10 percent to 35 million dollars and emerging markets generated net revenue growth of 10 percent in constant currency.