AUSTRALIA: Billabong issues profit warning as sales slump
Shares in Australian surf wear brand Billabong slumped today (19 December) as the company warned of slowing sales trends.
The share price fell 36.6% to AUD2.03 after the firm said half-year EBITDA is expected to fall to between $70-75m for the six months ending December, down from the $94.6m recorded in the same period of the previous year.
Billabong said that Europe is "by far" its most challenging market, followed by Australia, with slowing global sales coming as the general market environment has become highly promotional - which is "placing pressure on gross margins".
In Europe, the company said its own stores saw slightly positive same-store sales growth until the end of October, but this declined sharply in November, with the downward trend continuing into the first week of December.
Additionally, with limited snowfall and the late start to winter, the European retailers are pushing back early summer deliveries to late in the year.
"While it is expected that the group will deliver the majority of these summer forward orders in the second half, the later deliveries may result in lower in-season repeats," the company said.
Billabong has also begun a capital structure review with Goldman Sachs, including an assessment of all potential alternatives to strengthen the company's capital structure "in light of the existing operating environment and the risk for further deterioration". While it said that nothing has been ruled out, raising equity is "not the preferred path at this time".
In the second of a two-part series, Euromonitor International analyst Bettina Kurnik identifies the appeal of offshore e-tailers over their Australian counterparts, and reviews the way forward for loc...
Australian surfwear brand Billabong has named Launa Inman as its new managing director and CEO, replacing Derek O'Neil who left the company yesterday (8 May)....
- DENIM DAYS: Jeans innovation bursting at the seams
- How will TPP emerge from fast-track trade bill?
- Adidas pushing self-governance for suppliers
- 3D printing gears up for fashion industry change
- US fashion industry applauds trade bills package
- China textile and garment firms eyeing Morocco?
- Under Armour hailed "next global athletic company"
- Myanmar garment workers strike deal
- Orta and Garmon launch denim chemical screening
- Gap’s woes “not so easy to fix”