Costa Mesa clothing designer Volcom Inc. lowered its fourth-quarter and 2008 outlook and said it’s buying San Clemente’s Electric Visual Evolution LLC for $25.3 million.
Volcom, which makes clothes inspired by surfing, skateboarding and music, cited a slowdown in sales at stores that took hold over the holidays for its lower guidance.
The company now expects fourth-quarter profits of $7 million to $7.3 million, down from an earlier forecast of $7.3 million to $7.8 million.
Sales are seen coming in at $67 million to $68 million, down from $70 million to $73 million.
For 2008, Volcom said it sees profits growing 10% to 18%, versus its earlier expectation of 20% growth.
For 2007, Volcom expects profits of about $33 million.
The retail slowdown and Volcom’s own expansion spending drove the lowered yearly outlook.
The company is moving into sunglasses with its buy of Electric Visual Evolution.
The San Clemente company has yearly sales of $23.5 million.
Electric Visual makes sunglasses, goggles, T-shirts, hats, belts and other apparel.
Founder Kip Arnette has a pedigree in sunglasses: His father, Greg Arnette, started Arnette Optical Illusions Inc., which was bought by Bausch & Lomb Inc. and later Luxottica Group SPA.
Kip Arnette worked at Arnette Optical and left after the 1999 Luxottica buy to start Electric Visual.
Arnette and other Electric Visual owners could earn an additional $21 million in the sale to Volcom if they meet goals in the next three years.
Volcom said it expects the acquisition to have a neutral effect on its earnings this year.
The company plans to keep the Electric Visual brand and logo and run the business as a subsidiary.
