No snow makes Quiksilver profit fall, shares down

LOS ANGELES (Reuters) - Action sports apparel maker Quiksilver Inc. (ZQK.N) said on Thursday quarterly net profit fell nearly 87 percent and slashed its fiscal 2007 earnings outlook as a warm winter hurt its new ski business.

The company's shares fell nearly 11 percent in extended trading.

The surf- and skate-inspired company, best known for its Quiksilver and Roxy brands, said net income in the first quarter was $2.5 million, or 2 cents per share, compared with $18.6 million, or 15 cents per share, a year earlier.

Wall Street, on average, had been expecting earnings per share of 4 cents, according to Reuters Estimates.

Sales rose 2 percent to $552.5 million during the quarter, the Huntington Beach, California-based company said, a sharp contrast with a 58 percent sales jump a year earlier.

Chief Executive Robert McKnight called the winter sports season "the worst in decades" and said the company was experiencing poor reorders, heavy markdowns and fewer orders for next season.

"The effects of that can be expected to continue throughout the year," McKnight said.

Quiksilver acquired French ski manufacturer Rossignol in 2005, hoping to turn the well-known brand into a global apparel leader and significant new revenue stream.

The company has worked on integrating the brand over the past year, but given the seasonality of the business, Rossignol is supposed to provide a boost to profits in the first quarter, which encompasses the crucial winter sports season.

Quiksilver President Bernard Mariette called results "a clear aberration that resulted from weather."

"Rossignol's prospects for growth remain extremely compelling," Mariette said.

The Quiksilver, Roxy and DC Shoes divisions were meeting or exceeding expectations, the company said.

For fiscal 2007, Quiksilver now expects earnings per share of about 53 cents, down from a range of 75 cents to 78 cents given in February.

Wall Street, on average, had been expecting earnings of 76 cents, according to Reuters Estimates.

Fiscal 2007 sales are now expected to be roughly $2.45 billion, matching an average analysts' view.

Quiksilver also makes ski and snowboarding equipment under the brands such as Dynastar, Lange, Look, Gnu and Bent Metal.

The company's shares fell $1.36 in extended trading after closing at $12.96 on the New York Stock Exchange.