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Fourth quarter revenues are now forecast to reach $67 million to $68 million, down from $70 million from $73 million.
Earnings should be 29 to 30 cents per share compared to 30 to 32 cents previously forecast.
The reason? Slower than expected sales in the core distribution channels.
Here's the release:
COSTA MESA, Calif.--(BUSINESS WIRE)--Volcom, Inc. (NASDAQ:VLCM - News) today provided preliminary results for the fourth quarter and full year ended December 31, 2007. The company also provided an update to its financial outlook for the full year of 2008.
Based on preliminary estimates, for the fourth quarter of 2007, Volcom currently anticipates reporting total revenues in the range of $67 million to $68 million and expects earnings per diluted share of approximately $0.29 to $0.30. Previously, the company stated it expected total revenues to be between $70 million and $73 million and earnings to be between $0.30 and $0.32 per diluted share. The revised estimate primarily reflects lower than expected revenues in the core domestic distribution channels in the fourth quarter, and lower gross margin, each generally attributable to the weaker than anticipated retail environment. In the fourth quarter of 2006, Volcom reported revenue of $56.6 million and earnings per diluted share of $0.31.
Given these preliminary fourth quarter estimates, Volcom now expects full year 2007 revenues to grow approximately 30% to between $266 million and $267 million, compared with $205.3 million in 2006. Earnings per diluted share are expected to increase between 15% and 16% from 2006 to be between $1.36 and $1.37, versus $1.18 per diluted share as reported in 2006. Previously the company estimated annual revenue to be between $270 million and $273 million, and earnings per diluted share of $1.37 to $1.39.
In an effort to provide some insight into the company's financial outlook for 2008, in November 2007 Volcom said it believed that overall consolidated revenue and earnings growth of 20% was achievable. In further reviewing its growth plans amid the current challenging economic backdrop, the company is revising this outlook. For 2008, Volcom now anticipates that total revenue growth of approximately 18% and that earnings growth of approximately 10% are achievable. This preliminary 2008 outlook assumes pressure on domestic gross margin as well as expenses related to the company's growth initiatives. This preliminary outlook does not include any financial contribution from the acquisition of Electric Visual Evolution, which also was announced today. Volcom expects that Electric revenue will increase by approximately 20% and be earnings neutral to Volcom in 2008. For the year ended December 31, 2007, Electric posted annual revenues of approximately $23.5 million. Volcom intends to provide additional details regarding its financial guidance for 2008 and the company's various growth drivers during its next earnings conference call in February.
Volcom senior management will discuss these preliminary results and updated outlook during its presentation today, January 16, 2008, at the 10th Annual ICR XChange Conference at 3:55 p.m. PST at the St. Regis Monarch Beach Resort in Dana Point, California. The presentation is open to all interested parties through a live audio Webcast accessible on the investor relations section of Volcom's Web site, www.volcom.com/investorrelations/, where it will be archived and available for 30 days following the presentation.