Volcom Sees Q4 Sales Increases in All Segments…

Volcom, Inc. ended the year on a high note as sales increased in each of its product categories, in each of its geographic breakdowns, and in both customers large and small.

Overall, fourth quarter revenues increased 37.2% to $56.6 million, from $41.2 million last year. In the fourth quarter, men’s sales increased 19% to $28.5 million from $24.0 million last year, girls increased 48% to $19.3 million from $13.0 million, boys increased 61% to $3.4 million from $2.1 million, snow increased 111% to $2.3 million from $1.1 million, and other product, which includes the new Creedlers line, increased 551% to $2.0 million from $311,000 last year.

Geographically, sales in the U.S. increased 28.6% to $43.2 million from $33.6 million last year, while international sales increased 80.9% to $12.3 million from $6.8 million last year. The company’s five largest customers accounted for 48% of all revenues with sales to those customers increasing 29% to $26.4 million. At PacSun, fourth quarter sales increased 36% to $16.9 million from $12.5 million during the year-ago quarter as a result of additional, unexpected orders and the shift of some orders that occurred in Q1 last time into Q4 this time.

In the quarter, gross profit as a percentage of total revenues slipped 160 basis points to 47.2% compared with 48.8% in the fourth quarter of 2005, while SG&A expenses increased 20 basis points to 26.5% of sales. Net income for the fourth quarter of 2006, which includes a provision for income taxes using a 39.4% tax rate, increased 6.7% to $7.6 million, or 31 cents per diluted share, from $7.2 million, or 29 cents per diluted share.

For 2007, the company expects total revenues to grow approximately 34% to 36% over last year, resulting in sales of $275 million to $280 million with earnings per diluted share in the range of $1.44 to $1.47. During 2007, the company expects revenues from the European operations to amount to between $33 million and $35 million with an operating loss of approximately $5 million in H1 offset during H2 to make the segment “slightly accretive” for the year. For the first quarter, the company anticipates revenues will increase 15% to 18% to between $48 million and $49 million. Earnings per diluted share are expected to be between 15 cents and 16 cents for the quarter, including an anticipated 6 cents per share loss in Europe.