Poor Quiksilver result is bad news for struggling Billabong
Surfwear retailer Quiksilver has highlighted the global downturn in the sports apparel market after reporting sliding revenues and a drop in sales for two of its three flagship brands.
It comes as Quiksilver's rival, Billabong, last month breached its banking covenants after issuing its second profit warning in as many months and posted a $567 million write-down.
The dour market commentary from Quiksilver doesn't auger well for Billabong and its chief executive Launa Inman as she works frantically to turn around the loss-making retailer.
Ms Inman is also fending off private equity takeover bids for Billabong, with a range of US-based funds circling the group.
Investors hoping for a better year could have their hopes dashed after Quiksilver provided its quarterly earnings update to the market.
Quiksilver, which has more than $US2 billion in revenues, reported first quarter net sales of $US431 million, down 3 per cent.
The decline was focused in the troubled Americas region, where revenues decreased $US17 million or 9 per cent. For the half year to December, Billabong's sales in the Americas declined 20.1 per cent.
Quiksilver said Asia-Pacific revenue decreased 1 per cent and European revenues rose 2 per cent.
Its two leading brands, Quiksilver, its male brand for surf and snow, and Roxy, its flagship brand for women, both recorded marked falls in sales.
Global Quiksilver brand revenues fell 7 per cent or $US13 million.
Roxy global brand revenues dropped 7 per cent or $US9 million.
"$US7 million of that $US9 million shortfall was in the Americas wholesale, and most of that Roxy wholesale sales shortfall relates to the timing of clearance shipments," said Quiksilver chief financial officer Richard Shields. "So we're less concerned with the Roxy brand performance in the first quarter."
Revenues for its skateboarding- snowboarding DC brand increased by 1 per cent or $US1 million.
Recently appointed Quiksilver boss Andrew Mooney said the company would maintain price points in Australia and not chase discounting.