Quiksilver, Inc. (NYSE:ZQK) has released its Q1 results, seeing revenue grow 5% to $449.6 million compared to $426.5 million last year. E-commerce increased across all three global regions, with revenue nearly doubling in comparison to the first quarter of fiscal 2011. However, a lagging market due to bad weather conditions resulted in a loss of $22.6 million, or $0.14 per share. The pro-forma loss, which excludes $1.9 million of net after-tax severance charges, was $20.7 million or $0.13 per share. The company's gross margins declined 170 basis points due to higher sourcing costs and an increase in the clearance business.
Bob McKnight, chairman of the board, president, and CEOof Quiksilver Inc. asserted in the company’s webcast that Q1, a historically small quarter for the company, got off to a solid start. Brands Roxy, Quiksilver and DC performed strongly despite tough market conditions. McKnight commented, “Each of our brands performed well at retail and we're especially encouraged by the continuing recovery of the Roxy brand, whose best performing categories in the first quarter were swim and sportswear.”
Quiksilver is also continuing to diversify its business, collaborating with the NFL and NBA to present a line of boardshorts that sport league team colors and logos. In addition, the company opened its first Mountain Boardriders store in Chamonix, France, with a Barcelona location in the works. McKnight maintained that Q1 exceeded the company's expectations in terms of top line revenues and bottom line profits, fielding strong same store sales in company-owned retail business, with an increase of 11% in the Americas region, 9% in Europe, and 3% in the Asia Pacific region.
"Our European region continues to deliver strong results despite the difficulties surrounding the ongoing sovereign debt crisis and the late arrival of cold weather,” said McKnight. “These strong results more than offset the impact of closing under-performing stores in the region over the past year, and the warmer winter weather which delayed sales at retail until January. While we share the widely held concerns about the state of the European economy, we continue to strengthen our relationship with key customers who view us as the face of outdoor sports and we are taking market share from weaker competitors."
Looking forward, Quiksilver plans to continue investing in infrastructure and cites numerous promising ventures on the horizon, specifically for DC in China and South Korea. The company has added executives with strong industry experience to manage business and drive growth in both markets. McKnight stated, "As part of our five year planning process, we've identified and prioritized significant opportunities cost reduction, through further globalization of our operations. Early in Q1, we appointed Craig Stevenson to the corporate COO role and tasked him with leading our global initiatives."
For more details, check out full financial results here