Volcom, Inc.’s quarterly results continue to reflect the difficult retail environment as the company’s total consolidated revenues were $54.2 million for the second quarter, a 25% slide compared to $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, down 28% from $60.2 million in the prior-year period. In the U.S., men's product revenue decreased 30.8% to $23.8 million for Q2 compared with $34.4 million in the second quarter of 2008. Girls' product revenue decreased 27.1% to $12.1 million from $16.6 million in the second quarter of last year. Boys revenue, which includes the company’s kids line, decreased 18.9% to $4.3 million from $5.3 million in the second quarter of 2008.  Revenue from the Creedlers Footwear line decreased 4.7% to $927,000 versus $973,000 in the year-ago quarter. Revenue from the girls swimwear line decreased 27% to $1.2 million versus $1.7 million in Q2 last year.


Revenue from VLCM’s five largest accounts decreased 43% to $15.6 million in Q2, representing 36% of U.S. segment product sales, compared to $27.5 million in Q2 2008 when they represented 46% of the U.S. segment product sales.  Revenue from PacSun — Volcom’s largest customer — decreased 43% to $8.9 million for the quarter, representing 21% of total U.S. segment product revenue, compared with $5.8 million, or 27% of the U.S. business, in the comparable period in 2008. With the 22% increase in PSUN in the first quarter, the PacSun business for the first half of the year was down approximately 24%.
Excluding PacSun, revenue from the next four largest accounts also decreased 43% for the quarter. Revenue from accounts outside the five largest accounts decreased 14% to $27.6 million in the second quarter.
Operating profit in the U.S. fell 64.0% to $3.1 million for the quarter. Gross margins in the U.S jumped 260 basis points to 48.7% of sales versus 46.1% of sales in the year-ago period.


Total revenues in the company’s Europe segment were $5.9 million compared with $5.9 million in the same period in 2008.  The company narrowed its operating loss in Europe ever so slightly, posting a $2.2 million loss for Q2 in both years.


Total revenues in the Electric segment were $4.7 million compared with $6.4 million last year.  The operating loss widened in the Electric segment to $594,000 versus a loss of $89,000 in Q2 last year.
Electric's current distribution is said to be limited in many geographic regions and in certain channels-especially in Canada and Europe.  Management said they are now going after these opportunities and should see an increase in new door openings in the coming months.
Consolidated net income for the 2009 second quarter was $872,000, or 4 cents per diluted share, compared with $4.8 million, or 20 cents per diluted share in the comparable period in 2008.


VLCM 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 35 cents per share to 38 cents per share.