Core action mall retailer Zumiez management seemed very happy about their reported $0.79 per share net income in 2010, but the earning didn’t come from any increase in business, but rather from some “fishy” accounting tricks, according to a story on Forbes.com.
Zumiez (ZUMZ), a retailer of cool action apparel turned to an old account ing trick to boost its 2010 earnings by 13%. Digging through the foot notes of its 10-K filing, we found that ZUMZ increased the useful life estimate of its lease hold improvements. . . This change in accounting estimates reduces the company’s depreciation expense by $2.7 million after-tax and increases GAAP earnings by 13%.
But that’s apparently not the only trick in Zumiez accounting bag, according to writer David Trainer.
Increasing useful-life estimates is not the only accounting trick in ZUMZ’s bag. Further analysis of the financial footnotes also reveals that the com pany carries over $310 million (nearly 50% of its market cap and over 120% of reported net assets) in off-balance sheet debt. This large, hidden liability means the valuation of the stock is much higher and riskier than it appears.
Apparently, Zumiez is shifting over to the “whatever it takes” program.
Losses at Orange 21, the parent of Spy Optic, increased $1.2 million in 2010 to $4.6 for the Carlsbad, California based eyewear marketer, according to financial repors for the year ended December 31, 2011. But some of those losses were actually investments according to CEO Stone Douglass.
“We are pleased with our results for 2010 even though we had substantial direct and indirect additional operating costs related to our two newest brands, Margaritaville and Melodies by MJB, for which there have been minimal sales during this period,” commented Stone Douglass, the Company’s Chief Executive Officer. “Gross margins increased to 48% for the year ended December 31, 2010 from 40% during the comparable period in 2009, aided by more effective sourcing in Asia, and improved operations and a more favorable Euro to U.S. Dollar exchange rate on purchases from our Italian manufacturer, LEM.”
To get the full story tune in to Orange 21 investor conference call on March 30, 2011 at 1:30 PM PST. Just dial 1-866-711-8198[click to continue…]
Burton Snowboards has announced today that they have signed a licensing agreement with Korea’s “leading fashion company” LG Fashion to not only distribute Burton products but to license the brand to design streetwear in Korea.
To celebrate the new partnership, LG Fashion invited Burton Snowboards’ Co-Owner Donna Carpenter to a ceremony in Seoul this week where executives from the two companies officially signed the agreement. . . “It is a true honor for me to be in Korea to personally sign our new partnership agreement with LG Fashion,” said Donna. “With dozens of winter resorts and a snowy climate, Korea is a very important market for us, and we’ve always wanted to enhance Burton’s presence here. Now that we have such a reputable and established partner as LG Fashion, we can take Burton to a whole new level in the Korean marketplace.”
Not a bad way to go big in Korea quickly, but is this licensing deal the beginning of the end of Burton as we know it? [click to continue…]
On Wednesday March 23, 2011 Rick Alden announced that he was stepping down from his position as CEO of Skullcandy, the company he founded, and handing the position over to Skullcandy President Jeremy Andrus.
[Update March 28, 2011: Rick Alden has officially “resigned” from the company but will remain on the board. Ouch! And right before the IPO. Someone obviously isn’t happy. Follow the jump for the official press release.] [click to continue…]
We don’t follow the Dew Tour in general so we’re not really sure what any of these announcements mean, other that to say that it would appear that the courses are getting better with concrete and that there will be a bowl, all to be allegedly built by California Skateparks. And we know they do good work.
Here are the dates:
Dew Tour at Ocean City July 21-24 Ocean City, Md. – Ocean City Pier Dew Tour at Portland Aug. 11-14 Portland, Ore. – Rose Quarter Toyota Challenge Sept. 8-11 Salt Lake City, Utah – EnergySolutions Arena Dew Tour Championships Oct. 13-16 Las Vegas, Nev.
Chris Engelsman, the former Publisher of Snowboarder magazine has been promoted to Director of Sales Strategy for the ASG/Grind Network and former Snowboard Magazine Publisher Jeff Baker is rolling in to replace Engelsman at Snowboarder. ASG’s SVP Group Publisher Norb Garret is making strong moves, apparently.
“Both of these moves serve to strengthen our team and help advance the growth of the ASG/Grind Networks and the individual brands such as Snowboarder,” said Garrett. “In his new role Chris will work alongside Elisabeth Murray to help drive our businesses forward across all media as he has done at Snowboarder over the past several years. With Jeff we are thrilled to bring his insights and creative talents back to Snowboarder and anticipate continued growth with our print, events, digital and video platforms.”
Congrats to Engelsman and Baker. Follow the jump for the official word. [click to continue…]
We always thought it would be cool to have rollercoasters take us up the mountain during the winter. Apparently, Snowbird Resort wants to have a rollercoaster for people to ride down the mountain in the summer. As usual it appears we get everything backwards. Environmentalists currently oppose the plan.
NYC’s Shut Skates skateboards are made in America and owners Rodney Smith and Adam Shatz are proud of that.
“I’d feel guilty if I were to manufacture a product that the person purchasing didn’t know where it was manufactured and if it was gonna be top quality,” says co-owner and founder Rodney Smith.
It’s a shame that more large skateboard brands can’t be as proud.
The latest company that Shaun White has taken a bite out of is Kraft Foods. Their chewing gum brand Stride has signed a two-year contract to have Shaun be an official brand spokesperson. White appears happy to make room on his helmet for another logo.
“When Stride approached me about partnering with the brand, I knew it would be a great fit and I am looking forward to working with them on some pretty exciting things,” said White.
White will reportedly be involved in a variety of exciting things like “promotional activities throughout the coming months” including “giveaways, digital and social media campaigns, and public relations efforts.” We hope Kraft’s contract is a little stickier than Burton’s or White may not show up at all.
For the three months ended January 31, 2011, Quik reported a loss of $16.3 million compared to a loss of $5.4 million during the same quarter the prior year. Sales fell 1.45% from $432.7 million to $426.5 million. Sales in Asia/Pacific were essentially the same from one quarter to the other and rose $6.8 million in the Americas. But European sales fell 7.1% from $177.8 million to $165.2 million.
I’m very pleased to report solid first quarter results that were in all aspects better than we expected when the quarter began. Revenues of $426 million in the first quarter exceeded our plan, and were up in constant currency when compared to the first quarter of 2010. This marks the first time in the last nine quarters that we’ve grown revenues and constant currency and demonstrates that previous revenue declines are abating.
Guess the best way to feel good about losing $16.3 million is to plan on losing much more. For Mr. Harbaugh’s analysis on these numbers (including thoughts on Quik’s aggressive DC growth strategy) click the link.
Core action mall retailer Zumiez management seemed very happy about their reported $0.79 per share net income in 2010, but the earning didn’t come from any increase in business, but rather from some “fishy” accounting tricks, according to a story on Forbes.com.
