Shares of Huntington Beach-based Quiksilver Inc. got a boost in afterhours trading Thursday after the maker of surf-inspired clothes reported quarterly earnings that beat Wall Street’s expectations.
Quiksilver stock rose about 10% on a market value of about $215 million.
For the three months through October, Quiksilver reported a profit of $41.6 million, excluding a $55.4 million goodwill impairment charge.
Analysts on average had been expecting a profit of about $32 million.
Sales for the quarter grew 3% from a year earlier to $606.9 million, slightly higher than the $589.8 million anticipated by analysts.
“I am proud of the efforts of the entire Quiksilver team around the world as we fought through a deteriorating global economy to deliver financial results that were consistent with the outlook we provided six months ago,” Chief Executive Robert McKnight said in a conference call on Thursday.
Quiksilver, which has seen its stock fall more than 80% this year, has been working on a turnaround since unloading its struggling Rossignol ski unit in a November fire sale.
Debt from 2005’s $560 million buy of Rossignol and more recent borrowing to keep the operation going still is weighing heavily on Quiksilver, according to analysts who follow the company.
Quiksilver has hired Morgan Stanely to help it raise money, possibly by expanding borrowing with existing lenders or by selling shares to investors or a private equity firm.
The company, which has $1 billion in short- and long-term debt as of Oct. 31, said Thursday it is working with its banks to amend its loan terms to help pay off debt while it weathers the deteriorating economy.
Quiksilver has about $215 million in cash on hand as of Oct. 31.
For the current quarter through January, Quiksilver projects a loss of $12.7 million on a sales gain in the low single digits.
Analysts on average expect the company to report a profit of $2.5 million for the three months through January.
The company Quiksilver said it’s also looking to reduce expenses by monitoring inventory and cash.
Now that the company has sold Rossignol, Quiksilver is focusing its attention on its core clothing business.
Its Quiksilver, Roxy and DC brands continue to hold up better than others’ in the worst retail downturn in recent memory, the company said.
“Despite an increasingly challenging retail environment Quiksilver remains the clear No. 1 surf brand in the world, Roxy is still the No. 1 female surf brand and DC is one of the top three footwear brands in the entire action sports industry,” McKnight said.
