Quiksilver eyes improvement in North Americas market; ends Q2 with $118 million of cash, credit

By Lisa Kerner

Charlotte, N.C., June 9 – Quiksilver, Inc. chief executive officer Pierre Agnes expressed confidence that the company can turn its North Americas market around “into a profitable business in the next fiscal year.”

“We have very strong brands and are applying the successful business practices of the Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC) regions to the North American market,” Agnes said during Quiksilver’s second-quarter earnings call on Tuesday.

Agnes also noted major changes Quiksilver has undergone over the last two years, including moving from three regional companies to one global company.

Other changes include the SAP implementation, supply chain globalization and distribution center consolidation.

Financial highlights

At April 30, Quiksilver had about $118 million in cash and available credit. Of the $55 million in cash, $7 million is restricted. The company had $62 million available on its credit facilities, according to global chief financial officer Thomas Chambolle.

Chambolle said cash flow from operations, cash on hand, and restricted cash, as well as access to existing credit facilities, will provide sufficient liquidity for the next 12 months, assuming the renewal or replacement of EMEA lines of credit and overdraft facilities in fiscal 2015.

Global net revenues were down 2% year over year on a constant currency continuing category basis at $333 million.

“By region, net revenues in the Americas were down 4%, EMEA down 3%, with APAC up 7%,” said Chambolle.

Revenues in Quiksilver’s emerging markets increased 10% in the period, with double-digit increases in Russia, Mexico, and the APAC emerging markets. Brazil saw a decrease due to deliveries.

Second-quarter gross margin decreased 180 basis points to 47.1% due in part to currency exchange rates and liquidation sales.

Quiksilver is on track to meet its full-year capital expenditure guidance of $25 million, spending roughly $25 million in Q2.

The outdoor sports lifestyle company is based in Huntington Beach, Calif.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.