California Apparel News

Quiksilver Inc. announced a disappointing second fiscal quarter recently, and Wall Street analysts are asking what the Huntington Beach, Calif.–based surf giant should do next.

For Quiksilver’s second quarter, announced June 6, the surfwear company’s net revenues were $459 million, compared with $492 million in the same time in the previous year. Same-store sales for Quiksilver’s retail stores around the world declined 4 percent in the most recent quarter compared with the same time last year. The retail division’s net sales declined 5 percent to $91 million.

The second quarter’s declines follow the announcement of a new slate of top executives at Quiksilver, including new President and Chief Executive Andy Mooney, who joined in January.

In May, Mooney announced a recovery plan, and he said that the company was adhering to the plan. “We believe that, over time, our new focus and structure will allow us to significantly improve profitability,” he said in a statement.

B.Riley & Co. retail analyst Jeff Van Sinderen called Quiksilver’s new executive team strong. He also suggested that the company explore other avenues. “We believe that brands have tremendous value, and that could be fully unlocked by an acquirer if the company does not attain acceptable margins on its own,” Van Sinderen wrote in a June 7 research note.

Independent analyst Jeff Harbaugh noted that Quiksilver was looking to increase margin by becoming a more efficient company—"if they can be patient with distribution,” he wrote in a June 10 note. “We may all be pleasantly surprised with the results down the road.”