Sales Soar at Apparel Maker Volcom

Youth apparel maker Volcom Inc. reported Monday its first quarterly earnings since going public, offering fresh indications of the rapid growth that has made it a stock market darling this year.

The Costa Mesa-based company reported better-than-40% increases in operating income and revenue; net income declined about 10% because of a tax adjustment and a one-time charge.

Volcom declined to give earnings projections for the remainder of the year but said operating income probably would be in line with that of the first half.

The company forecast that second-half sales would rise 25% to 30% from those a year earlier; for the year, sales are expected to jump 34% to 37%.

Sales of fall products have been strong, the company said, singling out jeans, T-shirts and sweaters.

Since Volcom went public June 29 at $19 a share, its stock has risen 79%.

On Monday, the shares fell 51 cents to $34 in regular trading; the earnings report was released after the close of markets.

No analysts officially cover Volcom yet, but those who joined in on the company’s conference call Monday were generally upbeat about the quarter, which Joseph Teklits of Wachovia Securities called a “good start.”

But analyst Vera Van Ert of Wedbush Morgan Securities in Los Angeles said she found it “a little concerning” that the company did not expect its operating income to increase notably in the second half, typically an important time for retailers, given the back-to-school and holiday seasons.

For the second quarter ended June 30, Volcom said operating income increased 41.2% to $7.6 million, compared with $5.4 million a year earlier.

Sales jumped 47.1% to $35.9 million.

Volcom said net income fell to $4.6 million, or 24 cents a share, from $5.1 million, or 26 cents, a year earlier.

The company attributed the decline to a tax adjustment and a one-time $1-million legal expense.

Competitive surfer-turned-Chief Executive Richard Woolcott said Volcom would explore several growth options, including expanding its presence in Europe and possibly broadening its distribution next year.

Volcom sells largely through surf and skate shops, Pacific Sunwear of California Inc. and other specialty stores, and department store Nordstrom Inc.

Volcom, which stepped up its shipments to PacSun in the second half of last year, said the Anaheim-based retailer accounted for about 25% of its sales.

Woolcott highlighted Volcom’s marketing efforts, including a just-concluded skateboarding tour through the Midwest; the fact that a Volcom-sponsored skateboarder, Shaun White, snagged the silver medal at the X-Games in Los Angeles on Friday; and the release of “The Bruce Movie,” a documentary about surfing icon Bruce Irons that Volcom produced.

As his company grows, Woolcott vowed, Volcom will stay true to its roots, which are planted in Southern California surfing, skateboarding and snowboarding.

“Our biggest focus is on all our grass-roots efforts: supporting our team riders, supporting our customers and giving back to specialty retail,” he said in an interview after the conference call.

So far, the chief executive said, he is enjoying his role as the head of a public company.

In his off time, Woolcott said, he has been riding his mountain bike because local surf conditions have been so poor.

“Red tide and no surf’s not much fun,” he said.