Sometimes things just get uglier and uglier. The Street Ratings downgraded Quiksilver’s stock today (April 11, 2012) from a hold to a sell, accordion got a post on The Street.
The company’s weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally weak debt management and generally disappointing historical performance in the stock itself.
But the downgrade didn’t seem to bother the stock all that much. It was up a penny midday. Click the link for more of the details.
Despite higher sales for four consecutive quarters Quiksilver still has not been able to turn a Q1 profit, according to a story on Marketwatch.com.
For the quarter ended Jan. 31, Quiksilver reported a loss of $22.6 million, or 14 cents a share, compared with a year-earlier loss of $16.3 million, or 10 cents a share. Excluding restructuring impacts and year-ago interest charges, the adjusted per-share loss from continuing operations widened to 13 cents from a loss of 5 cents.
The company’s stock was trading down on the news, obviously. For a transcript of the entire March 8, 2012 Quiksilver analysts call (including Bob McKnight’s take on the quarter) click here.
“It is unfortunate that we announce the cancellation of the 2012 Quiksilver Pro New York,” Dave Prodan, ASP International spokesman, said. “The 2011 installment was a fantastic event with excellent waves, tremendous local support and some of the best surfing we enjoyed all season. That said, we understand the factors leading to Quiksilver’s withdrawal of the New York event from the 2012 schedule. We appreciate Quiksilver’s continued support of the world’s best surfers with the Australian and European elite level events in 2012.”
For those who are worried, Quik CEO Bob McKnight was quick to point out that this has nothing to do with Quiksilver’s commitment to surfing, “Quiksilver is still very much committed to the ASP and the professional surfing tour in 2012 with the Quiksilver Pro Gold Coast (Australia) and the Quiksilver Pro France.” No, we’re guessing it has more to do with Quiksilver’s continuing commitment to the bottom line. NYC is expensive, right?
As fans of competitive surfing we’re finding it hard to care about Quiksilver at all lately what with Kelly Slater’s rumored towel throwing on number 12 and Dane Reynolds falling off the tour to become Quik’s younger, better looking, more talented, less weedy Dave Rastovich. But by being a public company Quiksilver is forced to report their earnings so we’re somewhat obliged to at least copy and paste their quarterly press releases.
On the surface Quik “beat Wall Street expectations” according to Reuters. Revenues reportedly “grew 10% to $545.2 million as compared to $495.1 million in the fourth quarter of fiscal 2010 and grew 6% in constant currency.” This great news caused the stock to go up 12 percent this morning. Even with this boost, however, the stock is still down 31% on the year, and over 78% in the last five years). Luckily, the past doesn’t matter on Wall Street.
Then there are things they don’t count like “$52.1 million of special charges.” When you look at the year including “special charges” Quik ends up with a “loss from continuing operations [of] $21.3 million, or $0.13 per share, compared to $11.5 million, or $0.09 per share, for the full year of fiscal 2010.” So, while more informed heads will explain exactly why “special charges” don’t count, we’ll put it simply: Quiksilver lost nearly twice as much money in 2011 as they did in 2010.
The other thing we found interesting is that Quik is cliff dropping back into outerwear in the Americas. In the conference call (which you can read here) CEO Bob McKnight was particularly excited about re-re-relaunching the Quiksilver Mountain division at January’s Outdoor Retailer Show:
We see a large opportunity to expand our addressable market in the middle part of the United States and Canada by adding cold weather outerwear to our product range, much like we’ve successfully done in Europe. The first step in this strategy is the launch of the Quiksilver mountain division at Outdoor Retailer Show in Salt Lake City in January 2012.
A cynic would ask why McKnight believes the launch will work this time, where it has failed in the past. In these situations and with Quik’s business in general, it’s a good thing is that investors only care about two quarters: last and next. And because of that many are now rating Quiksilver a buy, which means it’s probably a buy again. Crazy. But before you log into trade, maybe you should read Jeff Harbaugh’s Market Watch.
On Saturday vandals “hose” painted “GO HOME” across the entire storefront, getting paint all over the newly conditioned brick, metal and glass.
The store had only been officially open for 24 hours. It would appear that some of the locals aren’t exactly down with the publicly traded surf clothing company putting a store in their neighborhood.
With the Quiksilver Pro in France set to kickoff the European leg of the tour on October 4, we took a step back from all of the Ke11y hysteria and examined the rest of the tour’s relationship to the venue. And although Kelly and Owen will surely be contenders, we found that Mick Fanning’s 60 percent event-win ratio over the past five years makes him a major player.
Right on the heels of one of the most amazing surf contests ever comes a little bad news for Quiksilver. Yesterday (September 21, 2011) the stock reached a new 52-week low of $3.44, according to a story on The Street. And what they have to say about the stock is even worse:
TheStreet Ratings rates Quiksilver as a sell. The company’s weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and generally weak debt management.
Ouch. Click here for the complete The Street overview of Quiksilver’s stock.
Quiksilver Australia has reportedly cut 20 merchandising and design positions from it’s Torquay headquarters thanks to a retail industry that is at its “worst in 20 years” according to a story in the Geelong Advertiser.
President of Quiksilver Asia Pacific Greg Healy yesterday told the Geelong Advertiser the job cuts were regrettable but needed in times when retail sales were down and there were overlaps between some positions. . . “I would say it’s been a pretty tough day for us because we pride ourselves on being a close-knit community but some decisions have to be made for the long-term,” Mr Healy said.
Some of those cut were reportedly offered transfer position in the US. That was nice.
To those who thought the Quiksilver Pro New York would be a dismal, flat, failure this photo of Josh Kerr with his tail four feet out over Long Beach in round 1 is about as big a “I told you so” as Quiksilver’s Bob McKnight could have asked for. And with hurricane Katia powered surf set to build through Thursday it looks like New York could see some epic ASP World tour action after all.
Other than the waves there weren’t many surprises. Follow the jump for the full report.
Sometimes things just get uglier and uglier. The Street Ratings downgraded Quiksilver’s stock today (April 11, 2012) from a hold to a sell, accordion got a post on The Street.
