Costa Mesa-based Volcom Inc. has the momentum. But will worries about consumer spending show up in the company’s third-quarter results and bring slower growth down the road?
Company watchers are set to see how the quarter played out for Volcom on Wednesday, when the Costa Mesa-based maker of snow, skate and surf apparel is set to release its earnings report, its second since going public in July.
Analysts expect Volcom to post $48 million in sales, up about 30% from a year earlier, according to Thomson Financial. Analysts expect about $5.6 million in profit in the period.
The apparel maker’s second-quarter sales grew at a torrid 47% pace.
Shares of Volcom, which hit a high of $37 shortly after its initial public offering, have fallen back to about $26 at a recent check. The shares went out at $19.
High gas prices and rising interest rates are starting to eat into people’s extra cash and making Wall Street nervous, said Wedbush Morgan analyst Vera Van Ert.
Worries aside, Van Ert said she expects Volcom to have a good showing for the third quarter.
“It’s a great brand with a lot of positive momentum behind it,” she said.
Volcom, which has 180 workers, designs edgy clothes for surfers, skaters and wannabes. It is one of the hottest clothing brands.
Publicly traded rivals include Huntington Beach-based Quiksilver Inc., and Irvine’s Billabong USA, whose parent Billabong International Ltd. trades in its native Australia.
Chief Executive Richard “Wooly” Woolcott declined to comment ahead of Volcom’s earnings.
Volcom said during summer that it expects sales for the second half of the year to grow 25% to 30% compared to a year earlier.
Earlier this week, the consumer sentiment index fell more than analysts had expected for October, according to the University of Michigan. National retail sales in September were up a slight 0.2%, compared to a year earlier. That was less than what forecasters were looking for.
“If you look at a lot of consumer stocks, they’re down, especially in the past month,” Van Ert said.
For more on this story, see the Oct. 24 edition of the Business Journal.
