Despite a “very weak summer” in Australia, Billabong International’s sales revenue was up for the six months to 31 December 2010.
The company reported $834.9 million in group sales revenue, which was up 15.8 per cent in Australian dollar terms compared to the prior corresponding year.
Its net profit after tax of $57.2 million, however, was down 18 per cent in reported Australian dollar terms.
Sales revenue in Australasia was $269.3 million, up 13 per cent from the corresponding year, which was the result of the strong sales revenue and constant currency terms in Asia and Japan.
Billabong CEO Derek O’Neill said the strong sales revenue was a result of “the execution of various strategic moves to enhance the route to market for the Group’s compelling brand portfolio”.
“Sales revenues in the Australasian segment lifted 13 per cent in constant currency terms, reflecting the addition of new company owned retail, including the acquisitions of SDS/Jetty Surf and Rush Surf in Australia,” he said.
“However, the performance of the underlying Australian business weighed on the region. A very weak summer and hi-summer indent, combined with cool, wet summer weather along Australia’s east coast, including major rainfall in Queensland in particular, led to soft sales at company owned retail and lower repeat business within the wholesale account base.”
The company also highlighted that the strength of the Australian dollar, against the Eruo and the US dollar, had “a significant adverse impact on the translation of the group’s reported results”.
On a constant currency basis, that is in the absence of the overall adverse impact of the strong AUD, sales revenue would have been approximately $49 million higher and net profit after tax approximately $6 million higher than the reported results.
Billabong also noted that the group’s online operations in Australia and the US continued to show strong growth with the upgrade of a key operating platform to facilitate lower cost expansion into other international territories.
“The group continues to invest in its online businesses and this includes the planned rollout of an in-store application that is designed to facilitate greater online business opportunities for bricks and mortar retail,” O’Neill said.
According to the group, it expects sales revenue for the full financial year ending 30 June 2011 to be in the order of $1.7 billion.