Sportswear maker Quiksilver Inc. said Monday that fiscal second-quarter profit rose 25%, aided by favorable exchange rates and rising international sales.
The Huntington Beach company's global reach will only increase with its acquisition of Skis Rossignol of France, which Quiksilver said should be completed by the end of next month.
Earnings for the quarter ended April 30 were $34.7 million, or 28 cents a share, compared with $27.8 million, or 24 cents, a year earlier. The results, a penny a share more than analysts expected, were adjusted for a 2-for-1 stock split in May.
Sales rose 32% to $426.9 million as prices were cut on some U.S. goods because of a colder-than-usual spring.
"They took a little gross margin hit to clear some inventory," said Jeffrey Van Sinderen, an analyst with B. Riley & Co. in Los Angeles.
In a conference call with analysts, Quiksilver executives noted how the Rossignol acquisition would influence the company's business.
The surf wear maker said it would launch a line of skis and bindings bearing its Roxy girls brand for next winter and planned to launch a Rossignol casual clothing line in 2007.
In addition, Quiksilver, which operates a surf-inspired chain called Boardriders Club, would focus on Rossignol's outdoor sporting goods test concept in Europe, dubbed Andaska, a blend of "Andes" and "Alaska."
"It's sort of like a combination of Sport Chalet meets the Patagonia store," Quiksilver Chief Executive Robert B. McKnight Jr. told analysts. "We think it's a great concept and could one day actually become a brand all in itself."
Andaska stores feature a wide range of outdoor products, including goods for skiers, backpackers, campers and mountain bikers. Rossignol is testing four Andaska stores in Europe and plans to open at least five more in France next year.
Jennifer Black, an independent analyst in Oregon, said the stores would help Quiksilver showcase its mushrooming stable of brands. Quiksilver said it had no immediate plans to roll out the concept in the United States.
"We're testing in Europe and doing very well with them, and you never know," McKnight said.
Quiksilver's second-quarter sales rose 34% in North and South America, 26% in Europe and 52% in the Asia Pacific region from a year earlier.
The company said it expected sales of $377 million to $382 million in the current quarter, and $1.52 billion to $1.53 billion for the fiscal year. Earnings should be 20 cents a share in the third quarter, in line with analysts' expectations. The projections exclude the Rossignol purchase, except for interest expenses associated with the acquisition.
Quiksilver stock closed unchanged at $16.36.