Quiksilver Earnings: Margins Shrink For Fifth Straight Quarter as Profit Falls

Rising costs hurt Quiksilver Inc. (NYSE:ZQK) in the fourth quarter as profit dropped from a year earlier. Quiksilver designs, produces and distributes apparel, wintersports equipment, footwear, accessories and related products.

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Quiksilver Inc. Earnings Cheat Sheet

Results: Net income for Quiksilver Inc. fell to $4.4 million (2 cents per share) vs. $67.9 million (38 cents per share) a year earlier. This is a decline of 93.6% from the year-earlier quarter.

Revenue: Rose 2.5% to $559 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Quiksilver Inc. reported adjusted net income of 7 cents per share. By that measure, the company fell short of mean estimate of 10 cents per share. It beat the average revenue estimate of $495.9 million.

Quoting Management: “We are pleased, despite economic headwinds in certain markets, especially Europe and Australia, that revenues for fiscal 2012 increased across all three regions, all three major brands and all three distribution channels, in constant currency,” said Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc. “We remain focused on our three core long-term initiatives, which are strengthening our brands, increasing global sales and driving operational efficiencies. Our brands received excellent exposure this year due to the success of our key athletes, who continue to dominate in our core sports. Our focus on sales resulted in continued growth for the Quiksilver and Roxy brands, as well as strong growth in our DC brand, our e-commerce business and our emerging markets. And, we made measurable progress in operating efficiency by controlling expenses, as seen in the reduction in fourth quarter SG&A as a percentage of sales.”

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell six percentage points from the year-earlier quarter to 45.9%. In that span, margins have contracted an average of 3.2 percentage points per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 1.8% to $512.4 million in the third quarter. The figure rose 3% in the second quarter from the year earlier and climbed 5.4% in the first quarter from the year-ago quarter.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 9 cents versus a mean estimate of net income of 6 cents per share.

For the fiscal year, the average estimate has moved up from 4 cents a share to 5 cents over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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