by The Editors on March 17, 2009
Apparently, a stock can just keep getting junkier and junkier. Today Standard & Poor’s Rating Service did just that to Quiksilver, according to a story on Forbes.com.
Standard & Poor’s Ratings Services said Tuesday that it lowered its ratings on Quiksilver Inc. deeper into junk status as the outdoor clothing and equipment company works toward a deal to improve its liquidity and capital structure. . . Our resolution of the CreditWatch listing will focus on Quiksilver’s ability to meet its near-term debt obligations, maintain adequate liquidity, and improve its operating business trends and financial metrics,” S&P said. “If the company can complete a refinancing or strategic transaction, then we may review the ratings for an upgrade.”
Oh, we thought they lowered the rankings because of that new Quiksilver.com/GO website. The one that makes you count to 100 before it loads?
[Link: Forbes.com]
by The Editors on March 16, 2009
It’s long and detailed, but for those in the mood to read the latest info from Volcom, follow the jump for everything you’ve ever wanted to know. And yes, they “currently expect a decrease in revenue from Pacific Sunwear compared to 2008.”
That and more after the jump.
[click to continue…]
by The Editors on March 12, 2009
Pac Sun reported Q4 numbers today and guess what? They sucked. But according to the Orange County Business Journal they were at least “better than expected.”
Losses for the quarter ended Jan. 31 totaled $27.1 million, or 42 cents per share, compared with a profit of $5.2 million, or 7 cents per share, last year. . . For the year, the Anaheim, Calif.-based company reported a loss of $63.8 million, or 59 cents per share, compared with a loss of $30.4 million, or 65 cents per share, last year. Revenue fell 4 percent to $1.25 billion from $1.31 billion last year.
It would be fun to be in a business where you have $63.8 million a year to lose, wouldn’t it?
[Link: BusinessWeek]
by The Editors on March 12, 2009
Things were bad everywhere, but Zumiez just announced a 49 percent slide in Q4 profit vs. last year. That’s like cuttin’ it in half.
Chief Executive Rick Brooks said the second half of fiscal 2008 was “incredibly challenging.” “Since September, the deteriorating economic conditions have significantly dampened consumer appetite for discretionary items,” Brooks said.
Yep, that’s what we keep hearing.
[Link: Forbes]
by The Editors on March 12, 2009
After yesterday’s Quiksilver conference call we kind of knew this was coming, but Reuters is now reporting that the company’s stock fell more than 20 percent in early trading based mostly on word that Quik was looking to sell off assets.
Analyst Eric Tracy of BB&T Capital Markets said in a note to clients that the company’s view of a muted cash generation, coupled with an extension of its credit line makes an asset sale unavoidable. . . “We believe the company may seek to sell its DC business to a strategic or financial buyer,” the analyst said, while expressing his worries that by selling DC, Quiksilver “would lose its fastest-growing, highest-margin business.”
That’s the rub isn’t it? Reminds us a little of Stephen King’s story Survivor Type.
[Link: Reuters]
by The Editors on March 12, 2009
For a nice overview on just how bad action sports fashion retail has gotten, tune in today (Thursday, March 12, 2009) to the Pacific Sunwear’s year-end and Q4 conference call at 1 PM PST and then the Zumiez year end call call at 2 PM PST.
Click here to listen to the PacSun train wreck live online or here for the Zumiez call.
[Link: MSNBC]
by The Editors on March 11, 2009
The boutique snowboard manufacturing bonanza continues in Calgary, Alberta with Jason Broz and Clyde Snowboards, according to a story in the Calgary Herald.
Determined not to get an office job, Broz started making snowboards out of his parents’ garage. Self-taught, he would make a board, test it on a slope and often bring it back in pieces to fix it in the garage. Soon, he found his interest in making boards surpassing his urge to ride them.”My passion shifted quickly,” he recalls. . . . Eleven years later, he has the skills to make excellent boards from scratch, tailored to any rider’s needs. He models himself after custom surfboard shapers, who get a sense of each rider they shape for and build a unique creation tailored to that customer.
Looks like more and more people are over riding the Anheuser Busch snowboard brands and would rather ride boards with a little more local flavor.
[Link: Calgary Herald]
by The Editors on March 11, 2009
If there was one thing to take away from today’s Quiksilver conference call (and there really was only one) it was this: Quiksilver management is focused on strengthening its balance sheet by increasing liquidity and improving its capital structure.
That line was repeated over and over. CEO Bob McKnight said it. Then then unflappable CFO Joe Scirocco would say it again. During the call we imagined that line billboarded on the wall of the Quiksilver conference room as a reminder to use it as an answer for every question.
It began making more sense when Scirocco laid it all out like this:
“In our current business plan we believe we have adequate liquidity in each region for the forseeable future. Nonetheless the current retail environment is significantly uncertain and we believe that we should further improve liquidity,” he said. “To that end we expect to decide on the course of action sometime between now and the end of June. We expect to increase liquidity either through a sale of assets or by issuing secured debt as well as to arrange committed credit facilities from our European banks and a new ABL with our US lenders.”
The European lenders who yesterday gave Quiksilver a three-month extension on their 55 million Euro loan expect to be paid before June 30. And Quiksilver expects to solve a $316 million debt problem on the same timeline. What are their options? Scirocco was about a direct as he could legally be:
In terms of what types of asset sales we’re looking at,” he said. “We’ve looked at everything (some are more strategic than others) and yeah they could include a brand. What we’re after here in terms of a strategy is liquidity and improving the capital structure.
Oh really? During the Q&A several analysts tried to ask the DC Shoes question. Some very cleverly worded their questions regard the DC Shoe business and what a hypothetical sale would mean to Quiksilver but Scirocco stayed firm and answered all the questions thoughfully, reminding everyone that he really couldn’t talk about specifics related to their plans to increase liquidity.
One thing is certain: we will all know before June 30, 2009. And if we were betting . . .
[Update: In other news Reuters is reporting that Quik has hired mergers and acquisitions bank Peter J. Solomon to “help find funding or an investor.”]
by The Editors on March 11, 2009
Quiksilver has just released their numbers for Q1 2009 and while $59 million sounds like a lot to lose, there is nothing all that surprising in the report. Net revenues were down 11 percent to $443.3 million vs. $496.6 million in the first quarter of fiscal 2008. The company lost $59 million on the quarter, but if you throw out one-time charges ($6.1 million in severance charges in the Americas and $50.8 million “non-cash charge to write off deferred taxes” in the US) then it was only a $9 million loss.
Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., commented, “While our performance in the quarter was in line with our overall expectations, deteriorating macro conditions made for a very difficult operating environment. Weak consumer traffic drove lower sales and margin compression which resulted in a loss for the quarter.”
The conference call starts a 1:30 PT (click here to listen) or follow the jump for the entire release.
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by The Editors on March 11, 2009
Quiksilver review their Q1 financials today, March 11, 2009 in a conference call that will be broadcast live over the Internet at 1:30 Pacific Time. The broadcast will be hosted at www.quiksilverinc.com and at www.viavid.net.
This maybe one of those calls we won’t want to miss.
[Link: MarketWatch]
Apparently, a stock can just keep getting junkier and junkier. Today Standard & Poor’s Rating Service did just that to Quiksilver, according to a story on Forbes.com.
