December 16, 2014
Quiksilver Executing On Strategy
Quiksilver announced their Q4 results on December 11th and from a quick read through of the earnings call, there was one or two interesting nuggets released.
Topline, the outlook is below analysts expectations, the revenue for last quarter was lower than expected and the loss was bigger than expected. Surprises all round!
However, CEO Andy Mooney states early in the call that, “The organizational restructuring of the company is now complete and the management team focused singularly on execution.” Now this is mostly right – there’s still $12 million marked for redundancies as part of the one time costs for next year, so “complete” might be an over statement unless I’ve misunderstood. On that point as well, Mooney says, “The rightsizing of our athlete and event roster is finalized and we now have resources to activate the many great athletes representing our brands, such as Dane Reynolds for Quiksilver, Stephanie Gilmore for Roxy, and Nyjah Huston for DC.” So the pain on the team front may be coming to an end.
For the core stores in Australia, there is some good news with the company putting their direct-to-consumer sales channels second to increasing their share of the traditional wholesale business. They specifically mention core retail several times and, interestingly, core surfing, skating and snow media. Their marketing spend is set to rise by 40% next year with the core publications being the focus of that spend.
The other major part of the presentation was the product – Mooney firmly believes that they have got it right from the leadership down. If they have, and they have stabilised the business (and will consequently stem the flow of bad news of company), plus the additional marketing spend in the core press, there’s a good chance that they can start to turn the perception of the brand around. I’m looking forward to seeing the results from Q2 next year after the last pieces of the turnaround have flowed through the numbers and we should be looking at some pretty positive news.