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.