Volcom management reported that for the year-to-date through the end of the third quarter, net sales had grown 33% to $265 million. Sales in the U.S. accounted for about 69% of Volcoms business, with Europe about 23% and Electric is about 8%.
Men's is about half of the companys business, Girls is about a third, and Boys, Eyewear and the other categories make up the remaining third. Management was happy to report to the room of investors that as of September 30th, the company had $73 million in cash on hand with nearly no debt. That cash on hand came after two acquisitions in the fiscal year, Electric Eyewear and a two-store surf chain in SoCal that accounted for $29 million. Inventory has grown from the year-ago level, but VLCM attributed some of the growth to the Electric acquisition. On a consolidated basis, turnover is about 7.6x per year for the first nine months.
Looking to 2009, management plans to keep distribution generally the same as it is now. However, they have decided to acquire the brands distribution rights in the U.K., seeing the country as “a big skateboard center as well as a large fashion center.”
Domestically, Volcom currently operates 10 domestic Volcom-branded retail doors as well as the two Laguna Surf & Skate stores the company acquired in 2008. Internationally, VLCM operates two stores in Europe and one in Japan, works with a licensee on eight retail outlets and has seven licensed international stores.
Under Armour Inc. reported that it expects fourth quarter net sales to range between $179 million and $180 million, up in the 2.5% to 3.0% range from year-ago sales of $174.8 million. Income from operations, however, is expected to decline between 15% to 22% to a range of $22 million to $24 million. Diluted earnings per share is expected to be in the range of 16 cents to 18 cents a share, down from 34 cents per share last year.
The company expects full year 2008 revenues in the range of $725 million to $726 million, up approximately 20% from year-ago revenues of $606.6 million. Full year 2008 income from operations are expected to be approximately $76 million to $78 million, down 10% to 12% from last years $86.3 million. Diluted earnings per share for 2008 will drop to between 76 cents and 78 cents from $1.05 last year. The company previously anticipated 2008 net revenues in the range of $750 million to $765 million and 2008 income from operations in the range of $97.5 million to $104.5 million.
Inventory at year-end, which includes approximately $15 million of running footwear to support the product launch on January 31, is expected to increase approximately 10% from year-end 2007.
G-III anticipates relying on its well-known brands in the difficult retail environment of 2009. The companys investor conference focused on the strengths of its different brands, primarily Calvin Klein, which COO and Secretary Wane Miller called G-IIIs “single biggest brand and fastest growing.” He continued to say that Calvin Klein is a business the company thinks could be “$100 million to $200 million.”
The most recent third quarter had sales up about 30%, driven by increase in both the license and non-license segments. This was the first year that the Wilsons outlet sales were included in the portfolio.
