A 27% plunge in American continent sales, led NYSE-listed marketer of outdoor sports apparel - Quiksilver, Inc., to report a steep 19% year-on-year drop in global revenues for the third fiscal quarter ending July 31, 2014.
Net revenues in the third quarter of 2014 totalled $396 million compared with $488 million in the third fiscal quarter of 2013, down $96 million or 19%, in constant currency.
Region wise, sales from Americas plunged 27% year-on-year to $191 million, EMEA sales fell 13% from a year earlier to $143 million and APAC turnover dipped 2% to $62 million in the third quarter of 2014.
Gross margin in the third quarter of 2014 also declined to 47.8% from 49.1% in corresponding quarter of 2103. Quiksilver attributed the decline to increased discounting in the wholesale channels of certain regions.
However, SG&A expense decreased $2 million to $213 million from $215 million. Quiksilver said the fall was driven by reduced employee compensation expenses as a result of lower severance costs.
Asset impairments totalled $183 million in the third quarter of 2014 compared with $2 million, reflecting a non-cash charge of $182 million in the third fiscal quarter of 2014 to write-off the carrying value of goodwill attributable to its EMEA reporting segment.
A bigger impact was felt by EBITDA, which slipped massively to zero from $53 million.
Versus income from continuing operations of $0.2 million, or $0.00 per diluted share in the third quarter of 2013, Quiksliver posted a massive net loss from continuing operations amounting to $220 million, or a negative $1.29 per share in the third quarter of 2014.
Andy Mooney, CEO at Quiksilver said, “As we expected, revenues for the third quarter declined in our wholesale channels in North America and Europe. In addition, late product deliveries, largely the result of our transition to global demand planning, negatively impacted our sales performance and gross margin.”
“We are resolving the product delivery issues and already see improved fulfillment in the Holiday season. We continued to right-size staffing, redeployed our marketing to invest more in media and point of sale, improved the quality of distribution in North America”, he added. (AR)
