As Billabong continues to swim in deep waters after reporting an earnings slump in its half year results, rejecting TPG’s offer to buy half of its assets and the decision to close stores, its US operation continues to remain strong.
According to Deutsche-Bank, sale trends remain strong in the US. Quiksilver reported company-owned retail sales growth of 11 per cent for the quarter to January and net revenues of +6 per cent. Zumiez reported comp sales of 9.7 per cent and The Buckle reported sales growth of 8 per cent to January. Both these numbers had been reported in monthly sales releases.
Quiksilver also reported strong retail sales in Europe (+9 per cent reported on pcp) with January +29 per cent due to late start to winter. Asia-Pac sales (mainly Australia) grew by 3 per cent. On the call the group noted that February in Asia-Pacific had been solid and it gained market share.
Zumiez is expecting high single digit comp sales growth for the quarter ending April. The group also intends to open 50 new stores in fiscal 2012 of which 10 are in Canada, which is different to most other players in the market who are looking to exit stores. The Buckle are also opening 11 stores.
On the other hand, Quiksilver has not provided near-term guidance but reiterated its five year plan and noted significant cost saving opportunities through further globalisation. This is consistent with industry reports of store closures in Australia – particularly for the Roxy brand.
“These data points confirm that US sales remain robust. Our concern, however, has been that this has been the trend for some time and this has not flowed through to robust Billabong group sales. The growth in Europe and Asia-Pacific is encouraging but largely in line with trends reported by Billabong in late December/January,” the bank said in its report.