Surfwear maker Billabong International today (20 February) said it is on track to post full-year earnings per share growth of between 6% and 10%, despite reporting a 7.1% drop in first half profit.

The Gold Coast company blamed a slowdown in consumer spending in the US for margin erosion in its biggest division, but said this is being partially offset by the appreciation of the US dollar and a strong forward order book.

Net profit fell to AUD82.4m (US$52.6m) or 39.9 cents per share, including a AUD2.3m impairment charge relating to Billabong's retail stores in the UK and US. Excluding this charge, profit was down 4.8% to AUD84.4m.

First-half sales rose 22.2% to AUD808.6m, helped by a strong performance in Europe and Australasia.

European sales lifted 24.0% to AUD177.8m, while Australasian revenues were up 6.3% to AUD245.7m.

While sales growth across the Americas as a whole rose 33.9% to AUD385.1m, this was boosted by acquisitions and favourable currency movements.

Margins, however, softened to 10.6% from 16.7% following increased investment in company owned retail businesses and lower underlying year-on-year sales "amid extremely weak economic and consumer conditions."

Earnings before interest, tax, depreciation and amortisation (EBITDA) remained steady at AUD147.3m, while group EBITDA margins fell from 22.2% to 18.2%, mainly due to tough trading in the US.

"The Group's forward order book, coupled with currency benefits and cost controls, gives the company the confidence it will achieve its guidance in the absence of any further significant deterioration in the global boardsports market," said CEO Derek O'Neill.