Quiksilver shares take a big dive due to discounting

Written By Unknown on Rabu, 04 Juni 2014 | 10.46

Major bummer to be a Quiksilver investor.

Shares of the surf-and-skate retailer totally wiped out Tuesday, losing more than 40 percent of their value after the company revealed seriously lame quarterly results.

Discounting has been a massive problem, as wallet-conscious surfers and skaters — or teens just craving the look — have refused to buy any board shorts, tees or tank tops that haven't been marked down severely, Quiksilver CEO Andy Mooney lamented.

"It doesn't matter if it's high-end department stores like Macy's or a mom-and-pop" surf-and-skate shop, a deflated Mooney said on conference call late Monday. "[Shoppers] are very price aware. They're looking for promotions and for price."

While a pair of Quiksilver's board shorts might get priced at $60 in a speciality store, H&M might charge $20 for a similar offering, Mooney said.

"That is a significant chasm," he said. "We don't intend to be at $20, but we probably have to be much less than $60."

A Tuesday freakout on Wall Street left Quiksilver's market capitalization, which had been about $1 billion on Monday, at just $579 million. The shares closed at $3.41.

That was a major embarrassment for analysts, including Goldman Sachs, which had advised investors to buy Quiksilver shares ahead of Monday's earnings announcement, arguing they were worth $9.50 a share.


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