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Revenues up just 3% at Quiksilver in Q2 FY'12
08
Jun '12
Quiksilver Inc. announced operating results for the second fiscal quarter ended April 30, 2012. Revenues grew 3% to $492.2 million compared to $478.1 million in the second quarter of fiscal 2011 and grew 5% in constant currency.

The net loss was $5.1 million, or $0.03 per share, compared to a net loss of $83.3 million, or $0.51 per share, in the second quarter of fiscal 2011. The net loss a year ago included $74.1 million non-cash goodwill impairment charge related to the company's business in Australia and Japan.

The pro-forma loss in the second quarter of fiscal 2012, which excludes $2.1 million of net after-tax asset impairments and restructuring charges, was $3.0 million, or $0.02 per share, compared to pro-forma income of $17.3 million, or $0.09 per share, in the second quarter of fiscal 2011, which excluded the $74.1 million non-cash goodwill impairment charge mentioned above.

The decline in pro-forma income was primarily driven by gross margin contraction. A reconciliation of GAAP results to pro-forma results is provided in the accompanying tables.

Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “I'm proud of the Quiksilver team's performance in the second quarter amid inconsistent economic conditions around the world. We continue to see examples of solid growth in our emerging markets while some established markets, particularly in Europe, have been impacted by regional economic uncertainty.

“Especially against this backdrop, we're pleased to see that the improvements we've made to our retail presence continue to drive positive comparable store sales in all three regions. We're also pleased to be turning the page on a challenging first half of the year that included a number of known headwinds that particularly affected our gross margins.

“We expect the second half of fiscal 2012 will compare favorably to last year as we anniversary higher input costs that we began to see in Q3 of 2011 and as we begin to deliver goods for our highly anticipated back-to-school season, particularly for DC.

“We also expect to reduce inventory levels in the second half as we anticipate a productive fall season and largely conclude the clearance activities we identified a quarter ago.”

Net revenues in the Americas increased 5% during the second quarter of fiscal 2012 to $221.0 million from $210.7 million in the second quarter of fiscal 2011. European net revenues decreased 6% during the second quarter of fiscal 2012 to $195.6 million from $206.9 million in the second quarter of fiscal 2011, and increased modestly in constant currency terms.

Asia/Pacific net revenues increased 27% during the second quarter of fiscal 2012 to $74.0 million from $58.1 million in the second quarter of fiscal 2011, and were up 24% in constant currency. The Asia/Pacific revenue growth was significantly driven by improved performance in Japan where revenues in the second quarter of fiscal 2011 were substantially impacted by the earthquake and related tsunamis in the region.

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