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Quiksilver posts Q3 profit
Quiksilver (NYSE: ZQK) said its third-quarter profit performance was hurt by increased costs and a weak economic environment.
The company reported that net income rose to $2.9 million, or $0.02 per share, for the quarter. This compares with a loss of $7.9 million, or $0.06 per share, in the same quarter a year ago.
Quiksilver’s net income from continuing operations dropped 7.4 percent to $33.1 million, or $0.25 per share, from $35.7 million, or $0.28 per share, last year.
Revenue from continuing operations increased 7 percent to $564.9 million for the quarter.
Quiksilver said profit margins were fattened by a higher percentage of sales in Europe and at company-owned retail stores. Results were also helped by a tax benefit.
Cost of goods sold rose 1.3 percent, while selling, general and administrative expenses leaped 19 percent year over year.
Robert McKnight Jr., CEO and president of Quiksilver, said the performance was “in-line with our expectations, and we are relatively pleased to deliver results in this range given the negative trends we’ve all witnessed during the quarter in the retail environment.”
The company recently announced that it had received a binding offer to purchase Rossignol and expects to close the transaction in the fall.
Quiksilver stood by its fiscal-year earnings view of “slightly below” $0.90 per share, including $0.03 from the tax benefit in the third quarter.
Hibbett Sports shares tumble after COO departure
Hibbett Sports (Nasdaq: HIBB) shares fell as much as 11 percent on Sept. 4, a day after the company’s chief operating officer, Nissan Joseph, left the company over “philosophical differences” following a seven-month stay.
Shares tumbled $2.46, or 9.8 percent, to close at $22.69. They fell to a low of $22.32 earlier in the session.
Raymond James analyst Dan Wewer downgraded the retailer to “market perform” from “outperform,” telling clients he was disappointed with the departure of Nissan Joseph. The news of the departure is surprising, as the investment community believed Joseph was off to a successful start at Hibbett, Wewer wrote in a note to clients.
“The company’s performance began to improve soon after his arrival. Investors prefer to see management continuity in well-run retailers. This announcement will raise concerns regarding the management succession plan for Hibbett,” the analyst wrote. “We have reason to believe that CEO Mickey Newsome was uncomfortable with the pace of new initiatives that Joseph wanted to implement.”
Joseph desired to speed up the rate of reinvestment in the company, while Newsome is reluctant to pursue investments that do not result in immediate returns, the analyst added.
SunTrust Robinson Humphrey analyst David Magee wrote in a client note that he expected some volatility to follow Joseph’s sudden departure. He said he was impressed by Joseph, though he may have been pushing too quickly for change. But he expects the company to improve in the long term.
Oppenheimer analyst Vivian Ma added in a note to investors, “While this does leave HIBB without an important executive going into the holiday season, we do not believe this is a major disaster for the company.”
Jarden issues new long-term earnings outlook
Jarden Corp. (NYSE: JAH) issued a new long-term earnings goal, saying it now expects to earn $5 per share by 2011.
The company had set a goal in 2005 to earn $3 per share within three to five years, or between 2008 and 2011. That goal should now be achieved in 2008, Jarden said.
Both the earnings outlooks exclude some restructuring and other charges, according to the company.
Jarden is the parent company of Coleman, Campingaz, K2 Sports, Volkl, Marker, Ride, Atlas, Marmot and ExOfficio
Eddie Bauer asks note holders for extension
Eddie Bauer Holdings said (Nasdaq: EBHI) it is asking holders of its 5.25 percent Convertible Senior Notes due 2014 for an extension from Jan. 4, 2009, to Jan. 1, 2012, of the current limitation contained in its certificate of incorporation on direct or indirect ownership of its common stock or other equity securities.
The purpose of the consent is to amend the indenture to allow the company to extend the 4.75 percent limitation on ownership or accumulation of its securities contained in the company’s certificate of incorporation to Jan. 1, 2012, while providing an exception from such limitation for conversion of the notes into common stock.
The company has retained MacKenzie Partners to serve as information and tabulation agent for the consent solicitation.
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