Surf and sportswear retailer Quiksilver Inc has reported a second quarter loss of $5.1m after economic uncertainty in Europe and clearance sales and higher input costs hurt margins.
But the company was buoyed by a 3% rise in revenues to $492.2m from $478.1m a year ago, with gains across its three major brands – Quiksilver, Roxy and DC. Same store sales in company-owned retail stores grew 6%.
It also saw “solid growth” in Asia/Pacific where revenues jumped 27% to $74.0m, as well as a 5% rise in the Americas to $221.0m. This helped offset a 6% drop in European net revenues in the three months to 30 April to $195.6m.
The company also said it expects to reduce inventory levels in the second half on a strong autumn season.
The loss of $5.1m or $0.03 per share, booked in the quarter compares to a net loss of $83.3m or $0.51 per share, in the same period last year – which included a $74.1m charge related to the company’s business in Australia and Japan.
Gross margin fell to 49.2% of net revenues from 54.8% a year ago. As well as higher levels of clearance business and higher input costs, the company also blamed the timing of certain royalties and the impact of foreign currency exchange rates.
“The improvements we’ve made to our retail presence continue to drive positive comparable store sales in all three regions,” said Robert McKnight, CEO and president.
“We’re also pleased to be turning the page on a challenging first half of the year that included a number of known headwinds that particularly affected our gross margins.
“We expect the second half of fiscal 2012 will compare favourably to last year as we anniversary higher input costs that we began to see in Q3 of 2011 and as we begin to deliver goods for our highly anticipated back-to-school season.”