Volcom’s sales for Q2 were down 25% from a year ago, but outperformed Wall Street’s expectations by $4.5 million (VLCM posted 54.2 million in Q2 sales versus estimates of $49.7 million). However, the company is lowering its outlook for Q3. Volcom said it projects a profit of $8.5 million to $9.2 million for the coming quarter; analysts had been expecting a profit of $11 million. Volcom said it expects sales for the quarter to come in at $82 million to $85 million, versus Wall Street's forecast of $93 million.
Here’s the Press Release:
COSTA MESA, CA – July 30, 2009 – Volcom, Inc. (NASDAQ: VLCM) today announced financial results for the second quarter ended June 30, 2009.
For the 2009 second quarter, total consolidated revenues were $54.2 million compared with $72.5 million in the second quarter of 2008. Total revenues in the company's U.S. segment, which includes revenues from the U.S., Canada, Japan and most other international territories outside of Europe, as well as the company's branded retail stores, were $43.6 million compared with $60.2 million in the prior-year period. Total revenues in the company's Europe segment were $5.9 million compared with $5.9 million in the same period in 2008. Total revenues in the company's Electric segment were $4.7 million compared with $6.4 million last year.
"Despite the continued macro economic challenges in the second quarter, our focus and drive to maintain the strength of the Volcom brand is resolute and propelled by our high quality and innovative products," said Richard Woolcott, Volcom's chairman and chief executive officer. "Our global presence is stronger than ever, and that, coupled with the sound management of our balance sheet, uniquely provides us with the solid foundation to position our company as a leader in the action sports industry."
Consolidated gross profit for the 2009 second quarter was $26.4 million, equal to 48.6% of total revenues, compared with $34.8 million, or 48.0% of total revenues, in the second quarter of 2008.
Selling, general and administrative expenses on a consolidated basis were $25.9 million in the 2009 second quarter versus $27.9 million in the comparable period in 2008. Total operating income for the second quarter of 2009 on a consolidated basis was $504,000, compared with operating income of $6.9 million in the same period a year ago.
The company's consolidated effective tax rate for the 2009 second quarter was 28.8% compared with 33.5% for the second quarter of 2008.
Volcom 2009 Second Quarter Financial Results
Consolidated net income for the 2009 second quarter was $872,000, or $0.04 per diluted share, compared with $4.8 million, or $0.20 per diluted share in the comparable period in 2008.
At June 30, 2009, the company had approximately $96.2 million in cash, cash equivalents and short-term investments, no significant debt and stockholders' equity of approximately $199.2 million. Net cash provided by operating activities for the six-month period ended June 30, 2009 was approximately $16.3 million compared with $5.8 million in the prior year period.
2009 Third Quarter Financial Outlook
In putting forth its financial guidance for the 2009 third quarter, the company noted a sluggish global retail environment amid continued economic weakness. As such, the company currently expects total consolidated revenues for the 2009 third quarter of approximately $82 million to $85 million and earnings per diluted share in the range of $0.35 per share to $0.38 per share.