Despite experiencing a slowdown in fourth-quarter sales, Volcom Inc. swung to a profit for the period and easily topped analysts’ estimates.
For the three months ended Dec. 31, the Costa Mesa, Calif.-based board sports apparel vendor said late Thursday that it registered net income of $3.4 million, or 14 cents a diluted share, compared with a net loss of $8.7 million, or 36 cents a share, in the year-ago quarter. Without asset impairment charges of $16.2 million on a pretax basis and a foreign currency loss on Canadian receivables, the company would have earned 14 cents a share in the 2008 quarter.
Revenue for the period slumped 7.8 percent to $63.5 million from $69.1 million in the 2008 period. Analysts expected EPS of 4 cents on sales of $62.8 million, Yahoo Finance said.
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Total sales in Volcom’s U.S. segment, which includes sales from the U.S., Canada, Japan and other territories outside of Europe, as well as the firm’s branded retail stores, slid 16.2 percent to $46 million from $54.6 million. Revenue in Europe grew 17.8 percent to $12.9 million while sales in company’s eyewear segment were $5.3 million, 39.8 percent above their year-ago mark.
“Although sales were down overall, the feeling out there is that the worst is probably behind us and we are now in a build-back mode,” chairman and chief executive officer Richard Woolcott said on the company call. “While 2009 created a seismic shift for us and our industry, it also marked the beginning of a new era for Volcom. I believe we’re now emerging as a better organization and in a prime position to seize opportunities and take market share.”
In order to achieve this, the ceo said the company would continue to focus on improving its product, as well as “fine-tuning” its price points. Volcom also will develop its marketing campaigns and increase both its Internet and in-store presence.
The firm, however, said it anticipated sales from its business with Pacific Sunwear of California Inc. to be down about 24 percent, to approximately $6.4 million, in the first quarter.
Annual profit grew 0.2 percent but, with rounding, was $21.7 percent, or 89 cents a diluted share, in both 2009 and 2008. Sales declined 16.1 percent to $280.6 million from $334.3 million.
The seller of action sports merchandise said it expects first-quarter EPS of between 16 cents and 19 cents and revenue in the range of $71 million to $74 million. Wall Street had been looking for earnings of 17 cents a share on sales of $69.1 million.