From: Los Angeles Times
By Leslie Earnest
March 09, 2007

Every company in the snow business has felt it. Quiksilver Inc., the world's largest surf wear company, wiped out last quarter on the ski slopes. Shares of the Huntington Beach, Calif., company fell almost 10 percent Friday, a day after it announced that first-quarter profit plummeted 87 percent from a year earlier.

The parent of the Quiksilver, Roxy and Rossignol brands blamed the earnings plunge on a miserable winter sports season that has worsened in the last several weeks. The company also significantly reduced earnings expectations for this year, prompting at least four analysts to cut their ratings on the company's stock Friday.

Quiksilver shares fell $1.25 to $11.71 after touching a 52-week low of $10.90 during the session. The stock is down nearly 26 percent this year.

If investors were irked, Duke Edukas, co-owner of Surfside Sports in Costa Mesa, Calif., was sympathetic. His snowboard sales have fallen 40 percent this season because of skimpy snow.
'Every company in the snow business has felt it,' Edukas said. 'Me and my partner and other people I deal with in the industry, we're all talking about it.

Quiksilver Chief Executive Robert B. McKnight Jr. also cited snow in speaking with analysts Thursday in announcing quarterly earnings, calling this 'the worst season in the past several decades.'

Snow resorts closed, freezing the sale of new equipment, he said. Stuck with leftover inventory, retailers are expected to make fewer orders this year. Quiksilver company said that it had seen heavy markdowns, poor re-orders and a significant reduction in orders for next season and that the effects were likely to be felt throughout the year. The company earned $2.5 million, or 2 cents a share, in the quarter ending Jan. 31, compared with $18.6 million, or 15 cents a share, in the same period the prior year. Sales rose 2 percent to $552.5 million. Quiksilver said it expected per-share profit of 53 cents this year, well off the 77 cents previously anticipated.

Analysts were particularly disappointed because the company in February cut its first-quarter profit projection to 4 cents a share from 9 cents and its annual estimate to 75 cents-to-78 cents a share from 91 cents.