Quiksilver Fiscal Q1 Net Up 40% on 33% Sales Gain; Raises 2004 Guidance

Quiksilver, Inc. announced consolidated revenues for the first quarter of fiscal 2004 ended January 31, 2004 increased 33% to $256.1 million as compared to fiscal 2003 first quarter consolidated revenues of $192.1 million. Consolidated net income for the first quarter of fiscal 2004 increased 40% to $9.2 million as compared to $6.6 million the year before. First quarter fully diluted earnings per share was $0.16 versus $0.12 for the first quarter of fiscal 2003.

Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “Our strong performance during the quarter, which once again exceeded expectations, is a great way to start the new fiscal year. These results were primarily driven by strong sales across all divisions, and better than expected operating margins, particularly in the Americas.”

Revenues in the Americas increased 21% during the first quarter of fiscal 2004 to $123.2 million as compared to fiscal 2003 first quarter revenues of $102.0 million. As measured in U.S. dollars and reported in the financial statements, European revenues increased 37% during the first quarter of fiscal 2004 to $106.2 million as compared to fiscal 2003 first quarter European revenues of $77.2 million. As measured in euros, European net sales increased 16% for those same periods. Asia/Pacific revenues were $26.3 million in the first quarter of fiscal 2004 compared to $12.1 million in the first quarter of fiscal 2003, which included only two months of Asia/Pacific operations since being acquired.

Mr. McKnight continued, “We recently returned from the MAGIC apparel trade show in Las Vegas, and the feedback from retailers regarding our fall lines was extremely positive across the board. Our retail stores continue to perform well both here and abroad. We recently promoted Carol Christopherson to Americas President of Retail, and we believe she will have a meaningful and immediate impact on our business.”

Consolidated inventories increased 24% to $179.3 million at January 31, 2004 from $144.2 million at January 31, 2003. Consolidated trade accounts receivable increased 16% to $200.6 million at January 31, 2004 from $173.5 million at January 31, 2003. Trade account receivable growth was modest compared to the increase in sales as average days sales outstanding decreased about nine days. Inventories grew 16% in constant dollars.

Bernard Mariette, President of Quiksilver, Inc. commented, “In addition to strong financial performance during the quarter, we continued to make progress on the development of our global operating platform. This was particularly true for our Asia/Pacific division. Our operations in Indonesia are performing very well, and we are excited to have hired David Toda as President of Quiksilver Japan. We continue to believe that Japan represents our best source of growth for this division in the near and intermediate term.”

Also, the Company increased its guidance to new ranges of $1.10 billion to $1.12 billion for revenues and $1.22 to $1.25 for earnings per share.

Mr. McKnight concluded, “Our multi-brand, multi-channel, global approach to our business continues to afford us significant growth prospects into the future. Our momentum remains strong, our financials are sound, and we remain committed to fully capitalizing on our leadership position in the market.”

             CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

                                                   Three Months Ended
                                                       January 31,
                                                   -------------------
In thousands, except per share amounts               2004      2003
                                                   --------- ---------

Revenues                                           $256,142  $192,080
Cost of goods sold                                  142,473   110,572
                                                   --------- ---------
   Gross profit                                     113,669    81,508

Selling, general and administrative expense          94,735    68,425
                                                   --------- ---------

Operating income                                     18,934    13,083

Interest expense                                      1,589     2,116
Foreign currency loss                                 3,267       551
Other expense                                           282       167
                                                   --------- ---------
Income before provision for income taxes             13,796    10,249
Provision for income taxes                            4,622     3,681
                                                   --------- ---------

Net income                                           $9,174    $6,568
                                                   ========= =========

Net income per share                                  $0.16     $0.13
                                                   ========= =========

Net income per share, assuming dilution               $0.16     $0.12