Quiksilver Inc. (NYSE: ZQK) closed their fiscal 2011 calendar with another impressive quarter, boosting revenue by 10% to $545.2 million from $495.1 million in the during the three-month frame with strong gains made in their three markets, the Americas, Europe and Asia/Pacific. ZQK reported that they earned $67.9 million for the quarter, a dramatic increase when compared to the $22.1 million lost during the same period in 2010. The positive strides made were attributed to the company’s commitment to improving products as well as increasing their presence in developing markets throughout the world, putting them in position to continue with their long-term plans.
Acknowledging the better than expected fourth quarter results ZQK Robert B. McKnight, Jr., Chairman of the Board, Chief Executive Officer and President of Quiksilver, Inc., stated, “We’re pleased to report another quarter of solid financial results and we exit 2011 in great shape to deliver improved performance in 2012 in line with our long-term plans. We made investments in fiscal 2011 to deliver better products from each of our brands, but we are most encouraged by the performance of our Roxy brand, which continues to gain traction in the marketplace and whose revenue performance compared to prior periods has improved steadily in each of the past five quarters.”
Perhaps most reassuring to shareholders were the yearly figures which showed net revenues for the full year of fiscal 2011 grew 6% to $1.95 billion compared to $1.84 billion in fiscal 2010. Most reassuring about this yearly growth is the fact that net revenues in the Americas increased 8% to $914.4 million; net revenues in Europe jumped 4% during the full year of fiscal 2011 to $761.1 million; and net revenues for Asia/Pacific grew 5% to $272.5 million for the full year of fiscal 2011.
Investors responded favorably to the news of ZQK’s yearly growth, pushing shares from a Thursday close of 3.07 to a high of 3.50 on Friday before closing the trading session at 3.46 on volume that topped 2.7 million. The 0.39 increase on Friday pushed shares above the company’s 50-day moving average of 3.17 and moved them closer to their 200-day moving average of 4.05.
As pointed out by McKnight, the continued emergence of the company’s Roxy brand could be a significant contributor to ZQK’s financial growth in the future. While the women’s line was started in 1990 as a way of tapping into the women’s surf market the brand has expanded its offerings to snowboarding and streetwear covering everything from boards, clothing, footwear, and accessories. According to ZQK Roxy is now a $500 million lifestyle brand and if the recent fourth quarter figures are any indication of the future there is plenty of room for growth in a market that is thin on competition.
It is difficult to find any fault with ZQK’s most recent quarterly report as their retail results clearly exceeded expectations. If there was something to pick at it would be the fact that despite improving their revenue in Asia/Pacific during the fourth quarter their gross profit in the region actually dipped compared to the same period last year. Most of ZQK’s problems in this region have been related to Australia and its “recessionary environment” according to McKnight. It was also pointed out that due to the strong Australian dollar tourism has been down and a as result the company’s retail stores have seen less traffic.
On the other hand ZQK has been optimistic about Japan where McKnight has said fourth quarter revenues were $25 million, “nearly back to pre-tsunami levels, reflecting quicker recovery than we had anticipated after the devastation of the natural disasters and their impact on consumer sentiment.”
Moving forward ZQK is looking to create a presence in South Korea and China, two markets that they believe offers incredible growth potential. Additionally, ZQK will be opening a second retail store in second Porto Alegre, Brazil, a market they believe can contribute significantly to their success. On the expansion front McKnight also noted that the company’s long-term growth drivers in Europe remain the same, with geographical expansion in countries such as Germany, Russia and India.
Heading into the new year ZQK has assured investors that they remain committed to their goal of “substantial revenue growth and significantly higher levels of profitability.” They have already seen positive figures tied to the holiday season and shareholders could be in for another treat when Quiksilver announces their first quarter 2012 results
