Australian surfwear retailer Billabong International today (20 August) booked a 4.5% drop in full-year net profit after sales were hit by the continued appreciation of the Australian dollar, but said it sees earnings growth in the year ahead.
The company said net profit for the year to 30 June fell to AUD146m (US$129m) – but that it was 8.1% higher in constant currency terms. Billabong reported a profit of AUD153m in the prior year.
Revenue from continuing operations was down 11.2% to AUD1.488 billion, but flat in constant currency terms. European sales fell 11.3% to AUD344.0m, sales in the Americas were down 14.8% to AUD712.6m, and Australasian sales dropped 4.2% to AUD425.7m.
But gross margins strengthened to 54.4% from 53.2% in the prior year, reflecting a less promotional retail environment, primarily in the US.
Billabong said, however, that it was well positioned for future growth in the year ahead, with net profit in constant currency terms to grow between 2-8% as an improved American outlook and continued strength in Europe offset a challenging Australian market.
The company also said it has reached an agreement to buy the 36-door Rush Surf retail chain in Australia, with the purchase expected to be completed in October.
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