• Q2 underlying net loss up 39% to US$46m
  • Net revenues down 10.5% to $408m
  • Issues profit warning for FY2014
Quiksilver branded sales fell 7%

Quiksilver branded sales fell 7%

Surf-led apparel business Quiksilver’s planned turnaround has hit trouble after soft revenues left the company with a bigger than expected second quarter loss.

The 10.5% decline in net revenues in the three months to 30 April came thanks to an 18% revenue fall in the Americas, plus falls of 2% and 6% in EMEA and APAC respectively.

Quiksilver branded sales fell 7%, while the company’s Roxy brand declined by 6% and DC fell 19%, the US business said.

Gross margin, however, was up to 48.7% from 45.9% last year, thanks to sales growth in the company’s direct-to-consumer business, reduced clearance activity in wholesale and the benefits of licensing activities.

Quiksilver said it expected its fiscal 2014 adjusted EBITDA to fall short of 2013’s figure of $118m despite predicted margin improvements, blaming continued revenue declines in the North America and Europe wholesale channel.

The company has also extended the timescale for achieving its Profit Improvement Plan adjusted EBITDA target to the end of fiscal 2017.

“We made progress on our Profit Improvement Plan,” said Andy Mooney, company president and CEO.

“During the second quarter, we again reduced our expense structure, increased sales in our direct to consumer channels and emerging markets, and drove improvements in gross margins.

“These improvements were offset by decreased net revenues in our wholesale channel, especially in the developed markets in North America and Europe.”