Quiksilver has reported another big net loss of $306.2 million for the financial year ended Oct. 31, 2015, after posting losses of $229.4 million in 2012/13 and $308.1 million in 2013/14. Group revenues fell by 14 percent to $1,345.9 million, with the Quiksilver brand accounting as before for 40 percent of sales, Roxy for 27 percent, DC Shoes for 27 percent and other brands for 3 percent. At constant exchange rates, total revenues were off by 4 percent, and they were down by one percent without counting the transformation into licenses for certain operations.
The group's gross margin dropped to 46.17 percent from 48.57 percent in the prior year. Operating expenses were cut by 16 percent, but Quiksilver still reported an operating loss of nearly $190 million, down from $253.1 million, after goodwill and asset impairment charges totaling $118.5 million.
Explaining the huge net loss for the year, the income statement, which will probably be the last one publicly issued by the group, also showed interest charges of $66.7 million, foreign currency losses of $6.1 million and reorganization expenses of $35.2 million.
Net revenues declined by 18 percent to $477 million in the Europe, Middle East and Africa (EMEA) region, with a drop of one percent in local currencies. The main reason was a drop in wholesale revenues from apparel, especially for Quiksilver branded products. E-commerce went up by 44 percent in the region. Sales in Russia fell by 18 percent in dollars but rose by 34 percent in rubles.
Sales in the Americas declined by 15 percent to $619 million, with changes in foreign currency exchange rates making a negative contribution of $30 million and the licensing of peripheral product categories cutting down revenues by a further $57 million. Regional revenues from e-commerce declined by 9 percent, due to less discounting. Wholesale revenues from Roxy and DC apparel fell by $14 million and $6 million, respectively. In constant currencies, sales increased by 35 percent in Mexico and were flat in Brazil.
In the Asia-Pacific region, the group improved its sales by 7 percent on a currency-neutral basis, but they were down by 6 percent to $245 million when translated into dollars. On a combined basis, sales in China, South Korea, Taiwan and Indonesia were up by 12 percent in dollars and by 21 percent in local currencies.
Worldwide sales under the Quiksilver brand fell by 15 percent to $537 million. They were down by 0.4 percent in local currencies, due primarily to lower apparel revenues in the EMEA wholesale channel.
Lower wholesale revenues for apparel in the Americas contributed to lower overall sales of $404 million under the Roxy brand in the past year. They were down by 16 percent in dollars and by 4 percent in constant currencies.
Sales under the DC brand were flat in local currencies and off by 14 percent to $367 million on a reported basis.
Across the group, revenues from apparel and accessories declined by 18 percent to $963 million in reported terms and by 3 percent in local currencies. Footwear revenues decreased by 4 percent to $383 million, but they were up by 6 percent on a currency-neutral basis, thanks primarily to increased revenues from Quiksilver shoes in the wholesale channel.
The impairment charges of $39 million taken for the year included write-downs of $21 million and $3 million, respectively, for the carrying value of the Quiksilver trademark within the EMEA and Asia-Pacific units, as well as charges of $11 million and $5 million, respectively, related to under-performing retail stores in the Americas and EMEA.
