Quiksilver sees lift in European sales for first quarter

By

Olivier Guyot

Published
Mar 11, 2013

The results are in for new CEO Andy Mooney’s first quarter at the Quiksilver Group. His aims at the group were to concentrate on “developing sales and improving operational efficiency” the Quiksilver, Roxy and DC brands.

That being said, the boss has yet to give a clear plan of action on how to achieve that. Mooney and his team are due to present a plan to the board in April in order to get the green light to go ahead with the new strategy.

Andy Mooney, who has said that we can expect to see the fruit of his team’s labour from autumn 2014, is of the school a thought that it is better to have fewer, quality products than more than average.

However, except from this, there have been no indications as to what the future might hold. The group’s most recent (and not-so-exceptional) quarterly results leave the management team with a lot of work ahead of them.

In an unstable European market, Quiksilver has managed to progress in the first quarter of this fiscal year, ended 31 January. The group has reported a 1% increase in revenues to 132 million euros (or 171 million dollars) against the same period one year ago.

Roxy and Quiksilver wholesale sales, however, are on the down; Quiksilver suffered a decline of 10% in wholesale sales, mostly due to activity in Asia-Pacific and the United States.

Globally, the group reported a decline in revenue of 3% for this quarter to 332 million euros (431 million dollars). The Americas saw a decline of 9% to 165 million in constant currency while Asia Pacific is down 2% to 56 million.

In terms of individual brands, Quiksilver and Roxy revenues are down 7% to 138 and 89 million respectively. Brands Boatriders and DC are on the up, with DC revenue increasing by 1% to 84 million. Of the more emergent brands at the group, Moskova has made the cut.

Losses are worsening

The group managed to improve its gross margins, reporting 51%, up from 50.7. Quiksilver Inc has also managed to reduce expenses but had to invest in the development of its e-commerce and suffered from unfavorable exchange rates. The group tripled its operational losses (which are at 6.7 million euros) due in large part to a loss of 6.8 million euros in the American market and to costs related to restructuration, which although are smaller than last year, are still at 12 million euros. Operational profit in Asia-Pacific moved from 700,000 to 1.6 million while Europe saw a decline of 1% to 10 million euros.

Net loss for the group over the quarter is at 23 million euros, up from 17 million on year previously.