Quiksilver Earnings, Sales Down for First Quarter

Quiksilver Inc., the major beachwear and casual clothing designer, on Tuesday reported lower first-quarter earnings and sales and blamed the decline on production delays and the recession.

The Newport Beach firm also said it has completed its acquisition of Na Pali S.A., a privately held French licensee of Quiksilver products. The company hopes to expand its European sales through the acquisition.

Earnings for the quarter ended Jan. 31 were $1.1 million, down 21% from $1.4 million for the corresponding period a year earlier. Sales were $15.9 million, down 12% from $18.1 million a year earlier.

Quiksilver Chairman John C. Warner said in a statement that second-quarter earnings and sales probably will fall short of their year-earlier comparisons if the recession continues. He added that the Na Pali acquisition should boost the company’s international sales and help profits.

Na Pali markets the Quiksilver brand in 17 European countries. The Newport Beach firm acquired Na Pali for $5.5 million cash and agreed to pay up to 250,000 shares of Quiksilver stock with a guaranteed value of $20 a share if Na Pali meets earning goals during each of the next two years. Quiksilver will also provide its new European subsidiary with $5 million in working capital.

Alice Ruth, an analyst for Montgomery Securities, a San Francisco investment firm, called the acquisition “an avenue for future growth.”

John S. McCartney, an analyst Branch, Cabell & Co. in Richmond, Va., said Na Pali “puts more money on the bottom line” for Quiksilver.

The analysts said Quiksilver’s earnings were on target. They said the company has recovered from a sharp plunge in its stock price in January when Warner issued a prediction that its first-quarter earnings would be lower than predicted.

The day after the announcement, Quiksilver stock fell $3.375 a share to close at $8.125. On Tuesday, Quiksilver closed unchanged at $12.25 in over-the-counter trading.