Quiksilver Q2 Loss Widens (ZQK)

Sports outfit maker, Quiksilver Inc. (NYSE: ZQK) reported on Thursday that its fiscal second-quarter loss widened as the bottom line was weighed by sluggish sales in Europe and impairment charges.

Shares slumped about 10% in aftermarket trading as both earnings and revenue fell short of analysts’ estimation.

The Huntington, California-based Company, which focuses on footwear, apparels and other accessories needed for surfing and skateboarding, has been reporting sequential sales growth for last two years; nonetheless, the bottom line felt the pinch due to higher promotional expenses in both Australia and Europe. Besides, higher input costs, (rising prices of cotton and polyester) also put pressure on gross margins.

In order to boost the bottom line, the Company, just last month said that it intends to focus more on its core brands, and cut costs. The turnaround plan, which is expected to be completed by 2016, will help boosting EBITDA (earnings before interest, tax, depreciation and amortization) by $150 million, the Company said.

For the fiscal second quarter ended April 30, the Company reported a loss of $32.4 million or 19 cents a share compared to a loss of $5.1 million or 3 cents a share, in the same quarter of last year. Adjusting onetime items, non-GAAP loss widened to 12 cents a share from a loss of penny a share, in the same quarter of last year.

Revenue fell 6.8% to $458.7 million.

Analysts’ consensus estimate was for a loss of 4 cents a share on revenue of $505 million.

Charges related to asset impairment climbed to $5.3 million from $415,000 in the same quarter of last year.

Gross margin shrank to 46% from 49.2%.

Revenue rose 3.5% from Americas division, plunged 16% at its European division while it fell 14% in the APAC region.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.