Quiksilver’s stock dropped 10 percent in after hours trading today (June 6, 2013) after the company announced that for the quarter ending April 30, 2013 they had lost $32 million on revenues of $459 million. But new CEO Andy Mooney wants everyone to know that Quik has everything under control.
“We recently announced a multi-year profit improvement plan designed to enhance the performance of our three flagship brands, Quiksilver, Roxy and DC, and accelerate our path to sustained profitable growth,” said Andy Mooney, President and Chief Executive Officer of Quiksilver, Inc. “With a reorganized management structure and our new leadership team largely in place, we have begun working toward globalizing key functions and gaining efficiencies to reap the benefits of our size and scale. We believe that, over time, our new focus and structure will allow us to significantly improve profitability, working capital efficiency and competitive positioning.”
Just keep reorganizing that leadership team and creating new profitability plans and there’s likely no end to the amount of money Quiksilver can lose. Then again, we should probably give Mooney a chance. He hasn’t been on the job all that long.
For the official word from Quiksilver (featuring not one word from Bob McKnight), follow the jump (or if you like numbers and charts click here).Quiksilver Reports Fiscal 2013 Second Quarter Financial Results
Company Provides Updated Guidance for Fiscal 2013
HUNTINGTON BEACH, Calif.–Jun. 6, 2013– Quiksilver, Inc. (NYSE:ZQK) today announced operating results for the fiscal 2013 second quarter ended April 30, 2013.
“We recently announced a multi-year profit improvement plan designed to enhance the performance of our three flagship brands, Quiksilver, Roxy and DC, and accelerate our path to sustained profitable growth,” said Andy Mooney, President and Chief Executive Officer of Quiksilver, Inc. “With a reorganized management structure and our new leadership team largely in place, we have begun working toward globalizing key functions and gaining efficiencies to reap the benefits of our size and scale. We believe that, over time, our new focus and structure will allow us to significantly improve profitability, working capital efficiency and competitive positioning.
“Our second quarter performance reflects net revenue declines primarily within our EMEA wholesale channel, along with lower gross margins across all three flagship brands, particularly within DC,” continued Mooney. “We continued to liquidate prior seasons’ inventory and meaningfully lowered operating expenses.”
Please refer to the accompanying tables for a reconciliation of GAAP results to certain non-GAAP results for the second quarter and first half ended April 30, 2013 and 2012, net revenues in historical and constant currency, and a definition of our emerging markets.
Fiscal 2013 Second Quarter Review:
–The following comparisons refer to the second quarter of fiscal 2013 versus the second quarter of fiscal 2012.
–Net revenues were $459 million compared with $492 million, and were down 5%, or $25 million, in constant currency.
–Americas net revenues increased 3% to $229 million from $221 million, and were up 4% in constant currency.
–EMEA net revenues decreased 16% to $165 million from $196 million, and were down 14% in constant currency.
–APAC net revenues decreased 14% to $64 million from $74 million, and were down 9% in constant currency.
Gross margin decreased to 46.0% of net revenues compared with 49.2%, primarily driven by increased discounting and clearance of DC product, increased discounting in Europe across the company’s three flagship brands, and inventory write downs related to certain brands and product categories which were discontinued in the second quarter.
SG&A decreased to $218 million compared with $224 million, primarily due to the company’s ongoing expense reduction efforts which resulted in savings across several expense categories.
Non-cash asset impairments were $5.3 million compared with $0.4 million.
Foreign currency gain was $2.6 million compared with $0.6 million.
Net loss attributable to Quiksilver, Inc. was $32 million, or $0.19 per share, compared with $5 million, or $0.03 per share.
Pro-forma loss, which excludes the after-tax impact of restructuring and other special charges and non-cash asset impairments from net loss attributable to Quiksilver, Inc., was $20 million and $2 million, or $0.12 per share and $0.01 per share, respectively.
Pro-forma Adjusted EBITDA was $19 million compared with $41 million, with the decline largely driven by gross margin and net revenue declines.
