Quiksilver's Americas & European biz deliver strong performances
Quiksilver Inc announced operating results for the second fiscal quarter ended April 30, 2011. Revenues grew 2% to $478.1 million as compared to $468.3 million in the second quarter of fiscal 2010. Consolidated gross profit of $262.2 million increased 5% compared to the second quarter of fiscal 2010 as gross margin expanded 160 basis points to a second quarter record of 54.8% of revenues. Pro-forma Adjusted EBITDA of $62.1 million was higher than the company's expectations and was roughly the same as a year ago.
Pro-forma income from continuing operations was $17.3 million, or $0.09 per share, compared to $15.7 million in the second quarter of fiscal 2010. Pro-forma income for the second quarter of fiscal 2011 primarily excludes a $74.1 million non-cash goodwill impairment charge and valuation allowances provided against tax assets totaling $26.0 million related to the Asia Pacific region.
Including the impairment charges and valuation allowances, the loss was $83.3 million, or $0.51 per share, compared to income from continuing operations of $8.8 million, or $0.06 per share, for the second quarter of fiscal 2010. 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, “We are pleased with our operating results for the quarter, and in particular with our return to overall revenue growth and our record gross margins. Our Americas and European businesses delivered strong performances, although our business in Asia Pacific was affected by the natural disasters occurring in several of our markets.
“While global markets remain uneven, we are seeing some really encouraging signs for the future. For example, this was our second consecutive quarter of strong double digit comp store sales in the U.S., and, for the first time in a while, we are seeing growth in our fall/winter order books for Roxy, which remains the world's largest and most respected girls action sports brand. So the initiatives we've set into motion are gaining traction and we remain on track to successfully transition to stronger growth in the future.”
Net revenues in the Americas increased 5% during the second quarter of fiscal 2011 to $210.7 million from $199.7 million in the second quarter of fiscal 2010. As measured in U.S. dollars and reported in the financial statements, European net revenues decreased 1% during the second quarter of fiscal 2011 to $206.9 million from $208.7 million in the second quarter of fiscal 2010. In constant currency, European segment net revenues decreased 4% compared to the prior year.
As measured in U.S. dollars and reported in the financial statements, Asia/Pacific net revenues decreased 1% during the second quarter of fiscal 2011 to $58.1 million from $58.6 million in the second quarter of fiscal 2010. In constant currency, Asia/Pacific segment net revenues decreased 12% compared to the prior year. Please refer to the accompanying tables in order to better understand the impact of foreign currency exchange rates on revenue trends in the European and Asia/Pacific segments.