Quiksilver, Inc. net revenues for the first quarter of fiscal 2007 increased 2% to $552.5 million from $541.1 million in the first quarter of fiscal 2006. Consolidated net income for the first quarter of fiscal 2007 amounted to $2.5 million compared to $18.6 million in the first quarter the year before. First quarter fully diluted earnings per share was two cents compared to 15 cents for the first quarter of fiscal 2006.
Robert B. McKnight, Jr., Chairman of the Board and Chief Executive Officer of Quiksilver, Inc., commented, “We are obviously very disappointed with our recent results and our guidance revision for fiscal 2007. Feedback on the wintersports season, which was the worst in decades, has further deteriorated over the last several weeks. We are experiencing poor reorders, heavy markdowns, and a significant reduction in the order book for next season and the effects of that can be expected to continue throughout the year. On a more positive note, Quiksilver, Roxy and DC continue to prosper, all meeting or exceeding plan, and we remain excited about the significant growth opportunities that still exist.”
Net revenues in the Americas increased 9% during the first quarter of fiscal 2007 to $240.6 million from $220.7 million in the first quarter of fiscal 2006. As measured in U.S. dollars and reported in the financial statements, European net revenues decreased 3% during the first quarter of fiscal 2007 to $254.0 million from $261.2 million in the first quarter of fiscal 2006. As measured in euros, European net revenues decreased 11% for those same periods. Asia/Pacific net revenues decreased 2% to $57.2 million in the first quarter of fiscal 2007 from $58.3 million in the first quarter of fiscal 2006.
Consolidated inventories increased 19% to $485.3 million at January 31, 2007 from $406.5 million at January 31, 2006. Consolidated trade accounts receivable increased 15% to $612.9 million at January 31, 2007 from $533.5 million at January 31, 2006.
Bernard Mariette, President of Quiksilver, Inc., commented, “We are working hard to accelerate expense savings and maximize the business opportunities across our entire organization. While we are unhappy with our results and near-term outlook, we believe this past season is a clear aberration that resulted from weather. Rossignol's prospects for growth remain extremely compelling. At the same time, Quiksilver, Roxy, DC and our entire portfolio of powerful brands continue to lead the industry in terms of design, innovation, product development and marketing. In fiscal 2007, we will further streamline our operations, institute a global sourcing initiative, and take advantage of opportunities to extend our product lines, deepen our distribution, and create new vehicles for growth.”
The company revised its fiscal 2007 annual revenue guidance to roughly $2.45 billion and its fiscal 2007 annual diluted earnings per share guidance to approximately $0.53.
Mr. McKnight concluded, “There is no question that we have challenges ahead of us this year. At the same time, we remain very confident about our prospects for the future. We believe that we will prove capable of developing a stronger, leaner, more focused business. To our shareholders, we are dedicated to exploring all potential avenues to improve profitability and enhance shareholder value. Our strategy is intact. Rossignol remains the premier mountain brand and continues to represent a tremendous, untapped opportunity. We move forward undeterred in our mission to leverage our position in the outdoor market and to build the reputation and reach of our brands around the globe.”
