Quiksilver shows 10.5 % sales decline in second quarter

By

Olivier Guyot

Published
Jun 4, 2014

Andy Mooney, CEO of Quiksilver since early 2013, defends his strategy despite tempestuous results. For its second quarter ending on April 30, the American company saw a decline of 10.5% in turnover to 300 million euros (408 million dollars) compared to the same period last year.

In the US, sales plummeted by 18% to 137 million euros (-16% at constant exchange rates). As for wholesale, Quiksilver ended up at -9%, Roxy at -14%, and DC at -35%.
The Asia-Pacific saw decline of 6% ​​to 44 million (+3% at constant exchange rates).

Revenues in Europe, the Middle East and Africa declined by 2% to 119 million (-5 % at constant exchange rates). In the wholesale channel, revenues for Quiksilver dropped by 9%, Roxy by 4% and DC by 12%.

The group saw its wholesale revenue decline by 2% in France, by 12% in Spain and by 15% in Germany. However, there was a 12% increase in Britain and a 27% rise in Russia.
By brand, overall sales for Quiksilver were down 7% at constant exchange rates to 123 million euros, Roxy by 6% to 89 million and DC by 19% to 76 million.

The company’s CEO, however, placed the emphasis on other figures. Store sales remained stable at 66 million euros and increased by 1% on a comparable basis. E-commerce business rose by 23% and business in emerging markets jumped 28%.

He also highlighted an improvement in gross margin from 45.9% last year to 48.7% this year. Expenditures were also slightly reduced, although not enough to balance its operating loss.

Indeed, the company has sunk deeper into the red, losses going from less than 10 million euros for the same period last year to more than 25 million euros this quarter. Its net loss dipped from 24 million last year to 39 million euros this year.

The company expects sales to follow similar trends through the rest of the year, especially with wholesale turnover in decline in America and Europe. It expects a further improvement in margins during the second half.