Volcom Q2 Profits Drop 22.6%
mike lewis
- July 25 2008
- 885 views
- 12 comments
Volcom lowered its earnings outlook for the year after it announced yesterday that second quarter profits dropped 22.6%.
Net income at the Costa Mesa based company slipped to $4.8m , or $0.20 per share, from $6.2m, or $0.25 per share in the same period last year.
However, despite the soft retail environment revenues for the three months to 30 June jumped 25.6% to $72.5m from $57.7m last time.
“The strength of the Volcom brand continued to resonate with our customers domestically and abroad in the second quarter,” said Richard Woolcott, Volcom’s chairman and chief executive officer. “We believe our multi-pronged diversification strategy is providing us with more means to successfully weather the challenging retail environment. We are focused on the fundamentals of our business, which will ultimately make us a stronger company in the long term.”
In the second quarter, gross margin was flat at 48.0%, and operating income fell to $6.9m from $8.8m.
Despite what it sees as a continued soft retail market for the rest of the year, for the third quarter, Volcom expects total revenues of $109m to $110m - up 20% to 21% over last year’s third quarter. Earnings per share are expected to be $0.63 to $0.64.
For the full year of 2008, Volcom expects consolidated revenue of between $344 million to $347 million, which is generally in line with its previous estimate. This estimate includes a full year’s contribution from the company’s European operation, which was operating at full capacity beginning in the third quarter of 2007, the financial contribution from the acquisition of Electric Visual Evolution in January 2008, and the contribution from the acquisition of Laguna Surf & Sport, which is anticipated to close later this month. Earnings per diluted share expectations have been reduced and are anticipated to be in the range of $1.50 to $1.53 versus previous guidance of $1.56 to $1.59.
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July 26th, 2008 at 7:57 am
I think it’s rad that Volcom’s earnings are down. They suck! Companies like Volcom and Quiksilver are destroying what surfing is and should be all about. They sold out!!
Quit screwing the little guys that got you there in the first place!!!
July 26th, 2008 at 8:36 am
Mr. Rad, you are sooo out of line with your comments…
We were one of the first Volcom dealers, along with Frog House and LS&S, and they have alway’s supported us in every way, shape and form. Yes, we are one of the “little guy’s” too, and for you to say they are ruining the Surf industry is just plain wrong. Companies like Volcom and Quik, not to mention Billabong and Hurley, do more for all of us than you know. What about all the events they run and sponsor? Helping young surfers get started. What about Reef Check, Project Blue, and their continued support of the Surfrider Foundation? I think you’re just bitter, and to be honest, it’s not easy to be a specialty retailer in this day and age, but, if you need to blame somebody, I suggest you look deep within yourself and ask the question, if Volcom, Quik, Billabong, and Hurley all went out of business tomorrow, would all that is wrong with the Surf industry, and for that matter the economy really go away? Back in 2001, when crazy terrorrist’s attacked our country, our sales were down 60% for two months, and it was truly “scary times”. All four of the above mentioned companies,came to me and told me that we were all in this together, and, not to worry about outstanding invoices that we might not be able to pay, until things got better. Well, things did get better and everything was cool by the time the Holiday season was over. Everything got back to normal, and I personally was very thankfull to have companies like Volcom as partners!
July 26th, 2008 at 11:15 am
Hey Duke,
I know who you are, nice job on your new store by the way.I too am a small retailer and have been for 30 years but let’s face the music here. These companies did sell us all out. Don’t tell me you are ok with Quik going direct online, with Volcom buying out your competitors only to open more doors and O’neill opening stores- oh wait you don’t carry O’neill because Jacks does, right?
Not trying to throw stones here but I think that you aren’t saying anything bad because you too are just waiting to be “bought out” by one of the above mentioned companies.
I never said anything about project blue or surfrider because I believe in and support companies that truly “help” what this industry is all about, and that shouldn’t be MONEY.
Bitter, YES, you called it, but only because I’m getting it up the ass by these companies that paid for your remodel.
July 26th, 2008 at 1:42 pm
Dear fellow retailer, (who ever you are.) Thanks for the compliments on our store, it wasn’t easy, but we got where we’re at because of us putting our ass on the line, not because the manufacture’s lining up to throw cash at us. (You try asking Paul Naude to pay for your new store!) When we started this project, I too was jaded by individuals like yourself into thinking the manufacture’s were paying for everyone’s new store’s. You can’t imagine how bummed I was when I found out that it wasn’t that way, not that way at all. Don’t get me wrong, we got help from everyone, but, I gurantee you we paid the “Lion’s Share” and trust me, it was a shit-load of “lion”. Bro, I wasn’t stoked when Quik started selling direct online, do you think I’m an idiot? But, I wasn’t stoked when they opened boardriders clubs, and Nordstrom’s many year’s ago either, and we made out ok because we evolved. All of us constantly have to evolve, or we’re destined for falure. Hell, I don’t know where Surfside will be 10 years from now. Maybe we’ll be out of business, or maybe, Hollister will buy us. And quite frankly, how many store’s can Nike, Quik, Volcom, and Billabong buy? Who’s next? What about Becker, Active, K-5, HSS, Sundiego, Val, Froghouse, Jack’s or ZJ’s? Only a fool would wait around for one of these companies to buy them with all the other options mentioned above. As far as the O’neill thing goes. Well, you have to admire them for their loyalty to their exsisting account base, I may not agree with it, or like it, but, I guess we’ll just continue to evolve.
July 26th, 2008 at 2:38 pm
mr rad has no clue… thats all
July 26th, 2008 at 3:43 pm
Dear Anonymous,
You must be able to come up with something better than that. I don’t need to explain myself to you, so I won’t. I’m willing to bet that you work for Volcom, and yes I do carry them, but I still think they sold out. Don’t talk unless you have something relevant to say, let’s talk in 20 years and see how you feel about the surf industry. When was the last time you opened a box of Quiksilver that left you with a pile of trash from floor to ceiling? Who makes this stuff anyway? Or do you really care? I’ve got a clue, I’m more clued in than you may know. Now get back to work.
July 28th, 2008 at 5:57 am
When was the last time you opened a box of Quiksilver that left you with a pile of trash from floor to ceiling? - What do you mean by that, they use tons of excess packaging?
As for Volcom… If they spent half the time improving the quality of their products as they do working on their image, maybe they wouldn’t be in this spot right now.
July 29th, 2008 at 6:37 am
we’re all here to make money off the sports skating and surfing. thats the bottom line. so dont be suprized when someone makes a move to be more profitable. I hate dealing with you whinny shops. i need a new job.
July 30th, 2008 at 3:12 pm
jeezuz, who cares, surfing sold out a long time ago, so if that’s your gripe you need to get out of the 80s and forget the Bud Tour ever existed.
and I’ve always loved what Volcom does, incredible art and design, not to mention the riders they sponsor; underground, edgy and all about innovation (obviously not all of them but they stay close & support some local heros).
I only wish the best for Volcom but I hope they steer clear of companies like Pacsun… too late on that one, but whatever, don’t put all your eggs in one basket, esp a shitty basket.
July 30th, 2008 at 5:07 pm
WHAHAHA…or even go back to the 50’s for that matter.
August 1st, 2008 at 8:32 pm
nice one
youth for establishment