Quiksilver, Inc. decreased its fiscal first quarter expectations to a loss of 9 cents to 12 cents per share, down from earlier guidance of a small loss. The company attributed the downgrade to both softer than expected reorders for wintersports equipment and a challenging global retail environment.
Robert B. McKnight, Jr., chairman of the board and CEO of Quiksilver, Inc., commented, “Our first quarter is proving to be more difficult than anticipated. The holiday season has demonstrated broad-based weakness at retail which has affected our wider business, including our company-owned stores both in the United States and in Europe. Additionally, wintersports retailers appear to be taking the opportunity brought about by good ski conditions in all major markets to clear the channel of inventory and achieve liquidity and are therefore delaying reorders. In anticipation of continuing weakness in consumer spending, we are taking incremental action to reduce expenses and discretionary capital spending, in order to maximize free cash flow and reduce debt levels.”
In addition, following the successful sale of Cleveland Golf in December 2007, the company is reviewing alternatives with respect to its other equipment businesses, including possible sales, and has hired JPMorgan to assist with this process.
