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Quiksilver Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: March 9, 2012 04:38PM

Quiksilver Inc. (ZQK) filed Quarterly Report for the period ended 2012-01-31. Quiksilver Inc has a market cap of $751.8 million; its shares were traded at around $4.26 with a P/E ratio of 28.4 and P/S ratio of 0.4.



Highlight of Business Operations:

Our total net revenues for the three months ended January 31, 2012 increased 5% to $449.6 million from $426.5 million in the comparable period of the prior year. In constant currency, net revenues increased 6% compared to the prior year. Our net revenues in each of the Americas, Europe and Asia/Pacific segments include apparel, footwear, accessories and related products for our Quiksilver, Roxy, DC and other brands, which primarily include Hawk, Lib Technologies and Gnu.

Revenues in the Americas segment increased 6% to $205.4 million for the three months ended January 31, 2012 from $193.8 million in the comparable period of the prior year, while European segment revenues increased 2% to $168.9 million from $165.2 million and Asia/Pacific segment revenues increased 11% to $74.6 million from $67.0 million for those same periods. The increase in the Americas came primarily from Quiksilver and Roxy brand revenues, partially offset by a decrease in DC brand revenues. The increase in Quiksilver brand revenues was primarily from strong growth in the apparel product category and, to a lesser extent, the accessories product category, partially offset by a slight decrease in the footwear product category. The increase in Roxy brand revenues was primarily from strong growth in the apparel and footwear product categories, partially offset by a decrease in the accessories product category. The decrease in DC brand revenues was primarily from the footwear product category and, to a lesser extent, the apparel and accessories product categories. Europe’s net revenues increased 4% in constant currency. The currency adjusted revenue increase in Europe was primarily the result of strong growth in DC brand revenues, partially offset by modest declines in our Quiksilver and, to a lesser extent, Roxy brand revenues. The increase in DC brand revenues was primarily from the apparel product category and, to a lesser extent, the accessories product category, partially offset by a slight decrease in the footwear product category. The decreases in Quiksilver and Roxy brand revenues were primarily from the accessories product category, partially offset by slight growth in the apparel product category. Asia/Pacific’s net revenues increased 8% in constant currency. The currency adjusted increase in Asia/Pacific came primarily from strong growth in Quiksilver and DC brand revenues, partially offset by a slight decline in our Roxy brand revenues.

Our consolidated gross profit margin for the three months ended January 31, 2012 decreased to 50.7% from 52.4% in the comparable period of the prior year. The gross profit in the Americas segment decreased to 42.8% from 46.2%, our European segment gross profit margin increased to 60.3% from 58.9%, and our Asia/Pacific segment gross profit margin decreased to 51.1% from 54.7% for those same periods. The decrease in the Americas segment gross profit margin was primarily the result of higher input costs and, to a lesser extent, higher levels of markdowns in our company-owned retail stores and price adjustments in the wholesale channel. Our European segment gross profit margin increased primarily as a result of a higher percentage of retail sales, including e-commerce, versus wholesale sales compared to the prior year. In our Asia/Pacific segment, the gross profit margin decrease was primarily due to additional clearance business in Australia.

Our selling, general and administrative expense (“SG&A”) for the three months ended January 31, 2012 increased 9% to $230.4 million from $210.4 million in the comparable period of the prior year. In the Americas segment, SG&A increased 8% to $89.5 million from $83.0 million in the comparable period of the prior year, while our European segment SG&A increased 7% to $86.1 million from $80.4 million, and our Asia/Pacific segment SG&A increased 7% to $37.2 million from $34.8 million for those same periods. As a percentage of revenues, our consolidated SG&A increased to 51.2% for the three months ended January 31, 2012 from 49.3% for the three months ended January 31, 2011. In the Americas, SG&A as a percentage of revenues increased to 43.6% compared to 42.8% the year before. In Europe, SG&A as a percentage of revenues increased to 51.0% from 48.7%, and in Asia/Pacific, SG&A as a percentage of revenues decreased to 49.9% from 52.0% for those same periods. The increase in SG&A as a percentage of revenues in both our Americas and European segments was primarily due to additional fulfillment costs in support of higher revenues in our e-commerce business. Europe’s SG&A increased 9% in constant currency. In our Asia/Pacific segment, the decrease in SG&A as a percentage of revenues was primarily due to higher revenues. Asia/Pacific’s SG&A increased 4% in constant currency.

Our trade accounts receivable decreased 19% to $321.8 million at January 31, 2012 from $397.1 million at October 31, 2011. Accounts receivable in our Americas segment decreased 17% to $170.6 million at January 31, 2012 from $204.8 million at October 31, 2011, European segment accounts receivable decreased 18% to $121.3 million from $148.0 million and Asia/Pacific segment accounts receivable decreased 33% to $29.9 million from $44.3 million for those same periods. Compared to January 31, 2011, accounts receivable increased 11% in the Americas segment, increased 14% in our European segment and increased 12% in our Asia/Pacific segment. In constant currency, consolidated trade accounts receivable increased 13% compared to January 31, 2011. The increase in consolidated trade accounts receivable was primarily the result of higher revenues. Included in accounts receivable at January 31, 2012 are approximately $27.2 million of value added tax and goods and services tax related to foreign accounts receivable. Such taxes are not reported as net revenues and as such, are deducted from accounts receivable to more accurately compute days sales outstanding. Overall average days sales outstanding increased by approximately one day at January 31, 2012 compared to January 31, 2011.

Read the The complete Report



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