Summary of Quiksilver (ZQK) Q4/2012 Earnings Conference Call December 13, 2012

Revenues in Q4 grew 7 percent in constant currency, with North America and Asia being the strongest regions.  However, gross margins declined from 52 percent in Q4/2011 to 46 percent in Q4/2012.  Further, gross margins for full year 2012 declined from 52 percent to 49 percent.  The gross margin decline was the result of increased clearance sales and discounting.   At the end of Q3, the past season's product was 16 percent of the company's inventory because the company overbought and Quiksilver focused on liquidating that inventory in Q4.  It is now back to levels of past season's inventory that are comparable to the beginning of 2012.  Quiksilver does not believe it will be able to increase prices in 2013. 

Quiksilver is expanding its line to ship cold weather Quiksilver and Roxy products to non-coastal regions of the United States and Canada. 

In Europe, Quiksilver is gaining market share as weaker brands are going out of business.  Sales in Europe were slightly higher in constant currency.

Quiksilver had good promotional sales around Black Friday, but December has started off slow.   

The company has seen strong sell-through of the DC Brand in its partnership with JC Penney.

Staff reductions in Q3 resulted in lower SG&A expenses in Q4.  Quiksilver also closed several underperforming stores in Q4.  Finally, Quiksilver reduced its marketing expenses.  Overall, SG&A expenses declined by 5 percent in the quarter.

The transcript of the earnings conference call can be found on Seeking Alpha at the following link:
http://seekingalpha.com/article/1063831-quiksilver-s-ceo-discusses-f4q-2012-results-earnings-call-transcript?part=single

Copyright 2012 Jaygo's Earnings Conference Call Summaries


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