Feb 25, 2010
Volcom fourth quarter profit trumps Wall Street estimates
Feb 25, 2010
Feb 25 (Reuters) - Volcom Inc (VLCM.O) posted a fourth-quarter profit that blew past estimates as lower discounting propped margins and said the company was better poised than competitors as it emerges out of the recession.
The surfing-inspired apparel maker, which sells to mall-based retailers and specialty chains like Zumiez Inc (ZUMZ.O) and Pacific Sunwear of California Inc (PSUN.O), also forecast first-quarter results mostly ahead of expectations.
For the first quarter, the Costa Mesa, California based company expects to earn between 16 cents a share and 19 cents a share, on revenue of about $71 million to $74 million.
Analysts on average were looking at 17 cents a share on revenue of $69.1 million, according to Thomson Reuters I/B/E/S.
"The feeling out there is that the worst is probably behind us and we are now in a build-back mode," Chief Executive Richard Woolcott said on a conference call with analysts.
Volcom plans to double 2009 revenue of $280.6 million by 2014 as it sets to grow its brand, Chief Financial Officer Doug Collier said.
Volcom has been working on improving its product mix, and on Thursday 25 February, the company said its wider array of denims and other action sports-related apparel were gaining popularity.
"In 2010 we intend to make calculated investments in our marketing and brand-building efforts to create longer-term returns ... We have the financial resources to pursue this strategy while also running a cash generating, profitable enterprise," CFO Collier said.
For the fourth quarter, Volcom posted a net income of $3.4 million, or 14 cents a share, compared with a loss of $8.7 million, or 36 cents a share, in the year-ago quarter.
Revenue came in at $64.2 million, down from the $69.6 million in the year-ago quarter.
Analysts expected earnings of 4 cents a share on revenue of $62.8 million.
Shares of the company were up 3 percent at $16.20 in trading after the bell. They closed at $15.66 Thursday 25 February on Nasdaq. (Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Unnikrishnan Nair)
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