ROTH CAPITAL PARTNERS: Hosting 27th Growth Stock Conference March 8-11 in Dana Point, Calif.
Details on Industry Insight.
Note: The original acquisition price for Sector 9 posted in this story did not include the other acquisitions that are included in the figure the company released. Correct wording is below.
Billabong International Limited released financial results this afternoon for the six months ended Dec. 31.
In the Americas, the company saw improving trends in company-owned retail stores but not as much in wholesale accounts, particularly large, mall-based chains. Sales to Pacific Sunwear declined substantially vs. the same period last year.
We break out results for Americas, including same stores sales for company-owned stores below.
Note: all results from all regions are in Australian dollars.
Net profit after tax: $69.7 million, down 7.6% in constant currency. Down $15.4% in reported currency.
Excluding a charge in prior year period, net profit after tax declined 9.5% in constant currency.
Total sales: $721 million, down 2.8% in constant currency, down 10.8% in reported currency.
Gross margin: improved to 55.5% vs. 53.8% vs. the same period last year. Margins improved in North America and were softer in Australasia and Europe regions.
Retail sales: Sales through company-owned stores increased to 26% of total sales. Billabong now owns 360 stores vs. 335 at the end of June. It is focusing on opening stores in Europe and Asia.
Retail EBITDA margins: improved to 14.6% vs. 14%
Swell & Surfstich acquisition: Terms of the online retail acquisitions were not disclosed, but CEO Derek O’Neill said in a release, “These operations should help the Group develop an online base to reach all consumers, regardless of their geographic location.”
Guidance: Reaffirmed guidance of 5% growth in Net Profit after Tax for the full year ending in June.
Acquisitions: The company disclosed a total purchase price for Sector 9 and retail acqusitions in Australia and UK in 2008, including Two Seasons, of $45.8 million, including costs and estimated deferred payments.
Sales: $317.5 million, down 6.2% in constant currency. Down 17.6% in reported currency. This period’s results included a boost from six months of revenue from DaKine while the previous period last year included only three months of revenue, the company said.
Sales to Pacific Sunwear: down approximately 50% vs. the same period last year. For the full year, the company expects PacSun’s contribution to overall North American sales to decline to a single digit level.
EBITDA: $33.7 million, down 4% in constant currency. Down 17.4% in reported currency.
EBITDA margins: Flat at 10.6%. Excluding foreign exchange hedging fluctuations and global overhead charges, margins were 13.4% vs. 13%, The company was proud of this results given the tough market conditions, it said.
Company retail: sales through company-owned stores increased 3.3%, with a slight growth in the number of stores vs. the same period last year.
Same store sales: down 10%, improving from down as much as 20% in July.
Total number of stores: 94. Two stores closed during the period.
Overall assessment: Conditions remain “patchy” in U.S. Company-owned retail sales trends improving, but not as much in wholesale channel. Some retailers are putting price and terms ahead of product appeal, the company said. Tight credit is still an issue for some retailers. The company does not expect trading conditions to improve during the next six months. Summer orders are meeting plan so far.
Europe was a bright spot, with sales in France and Germany growing in the double digits, and the UK showed some positive signs. Spain was still struggling, and Italy showed softness. Sales in Central Europe are growing.
Sales: $164 million, up 2.6% in constant currency. Down 7.8% in reported currency.
EBITDA: $29.1 million, down 5.1% in constant. Down 18.5% in reported, largely due to currency issues.
EBITDA margins: 17.8% vs. 20.1%. Excluding hedging fluctuations and other issues, margins were 21.9%.
Company retail: Sales rose more than 20%, with the Two Seasons chain in UK particularly strong. Ended the period with 90 stores – 56 standalone and 34 shop-in-shops.
Brands: Nixon and Element benefited from skate and urban trend.
Winter: Good snow and cold weather let to good sell through of winter and technical goods. Winter 2010 orders going as expected thus far.
Sales: $239.5 million, down 1.4% in constant currency. Down 2.5% in reported currency.
Sales in Australia were solid, but were weak in South Africa, Japan and New Zealand.
EBITDA: $59.7 million, down 14% in constant currency. Down 14.2% in reported currency.
EBITDA margins: 24.9% vs. 28.3%. Excluding unusual items, margins fell to 27.9%
Brands: Tigerlily, Dakine, Sector 9 were particularly strong.
Stores: 157 company-owned stores vs. 143 at the end of June. About 75% of stores in this region are outside Australia.