Dim Forecast Pushes Quiksilver Stock Down 30%
Quiksilver Inc.’s stock fell nearly 30% Thursday, a day after the beach and ski clothing designer issued a gloomy quarterly financial forecast.
Quiksilver stock closed at $8.125 per share, down $3.375. It was the third-most-actively traded issue on the National Assn. of Securities Dealers Automated Quotations system, with more than 2.4 million shares changing hands.
On Wednesday, the Newport Beach company said it would report lower sales and earnings for its fiscal 1991 first quarter ending Jan. 31, although it released no specific figures. The company blamed the recession and said it anticipates flat or lower results through the April quarter unless the economy improves.
The company, a leading supplier of surfer-inspired beachwear, had no comment Thursday on the stock decline.
Industry observers have said the growth of the once-booming beachwear industry is beginning to slow as the novelty wears off with teen-age consumers.
“The look has kind of peaked,” said Miriam W. Meglan, an analyst who follows the industry for Johnson Rice & Co., a New Orleans investment firm.
She said Quiksilver had disappointing Christmas sales and delays in getting deliveries from companies with contract manufacturers. It also had a large order from some military base stores canceled, Meglan said.
Some analysts expressed surprise that Wall Street reacted so strongly to the earnings forecast.
“Today’s reaction to Quiksilver has been largely overblown,” said Gary M. Jacobson, analyst at Kidder, Peabody & Co. in New York.
John S. McCartney--an analyst who follows the beachwear industry for Branch, Cabell & Co., a Richmond, Va., investment firm--said he sees no indication of serious problems at Quiksilver, where inventory levels are stable and the company has sufficient cash and little long-term debt.
“I think they are getting a bash maybe they don’t deserve,” he said.
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