Quiksilver Files Its 10-K for the Year

Last week, Quik filed its’ annual 10-K report with the SEC covering the quarter and year ended October 31, 2010. They announced their earnings by press release and held a conference call back in December. I’m not going to reanalyze their financials. I did that last month and you can read it here. But the north of 100 pages annual 10-K has a few additional details I thought might interest you. They aren’t presented in any particular order, except sort of from front to back in the 10-K.

Here’s a paragraph where Quik describes its average retail prices:

"We believe that retail prices for our U.S. apparel products range from approximately $20 for a t-shirt and $43 for a typical short to $190 for a typical snowboard jacket. For our European products, in euros, retail prices range from approximately €22 for a t-shirt and about €50 for a typical short to €162 for a basic snowboard jacket. In Australian dollars, our Asia/Pacific t-shirts sell for approximately $39, while our shorts sell for approximately $60 and a basic snowboard jacket sells for approximately $250. Retail prices for our typical skate shoe are approximately $60 in the U.S. and approximately €67 in Europe."
I don’t know that there’s anything of great import to deduce from that, but I thought some of you might like to see how it compares to what you know about retail prices. On to the next random piece of information.
Quiksilver branded products are sold in the Americas through about 11,500 store fronts. The Americas includes Canada, and South and Central America. Roxy is in 11,300 store fronts. The number for DC is 12,000. All three brands together are in a total of 10,800 locations in Europe and 3,360 in Asia/Pacific.
About 40% of revenue worldwide comes from what Quik calls “core market shops.” Interestingly, that number is lowest in the Americas at 28%. It’s 41% for Europe and 77% for Asia/Pacific. I’d love to know what their definition of “core market shop” is.
18% of consolidated revenues from continuing operations were from their ten largest customers. The largest single customer accounted for less than 3%.
Quiksilver has pretty much gotten away from seasonality, which is a good thing (take it from somebody who has had to manage cash in a snowboard company). Their biggest quarter last year was 27% of revenues and their smallest 24%.
At the end of the year, Quik had 540 stores worldwide. 116 are company owned outlet stores and 6 are licensed outlet stores. Quik had a total of 224 of what they call licensed stores. In these stores they “…do not receive royalty income from these licensed stores. Rather, we provide the independent retailer with our retail expertise and store design concepts in exchange for the independent retailer agreeing to maintain our brands at a minimum of 80% of the store’s inventory. Certain minimum purchase obligations are also required.”
I wonder what happens if those Quik brands aren’t the ones selling well, what flexibility they have with regards to that 80%, and what the purchase terms for that merchandise are.
Future season orders: $478 million as of November 2010 compared to $535 million at the same time the previous year. That’s a decline of 10.65%.
Number of employees: 6,200 full time equivalent; 2,600 in the Americas, 2,200 in Europe and 1,400 in Asia/Pacific.
Advertising and promotion budget: $106.9 million in 2010. It was $101.8 million in 2009 and $122.1 in 2008.
Allowance for doubtful accounts: It has risen from $31.3 million at the end of fiscal 2008, to $47.2 million at the end of fiscal 2009 to $48 million at the end of fiscal 2010.
I’ve got no great analysis to lay on you. I did that, to the best of my ability, when they announced their earnings. But I am very aware that a number of you heave a sigh of relief when I go through these somewhat arcane documents so you don’t have to. Anyway, I hope this was useful.   



4 replies
  1. Christopher Scott
    Christopher Scott says:

    I agree with GB.

    It would also be interesting as a trending analysis to see what percentage of Quik and all endemic brands marketing budgets are going to new markets; specifically China. China poses some interesting opportunities for Action Sports in general.

    I was at Agenda and spoke with Vans Senior Communications Manager Chris Overholser. He wasn’t able to provide any specifics about marketing in the Asia. He said that was all handled out of Hong Kong.

  2. markfitzy
    markfitzy says:

    Expect China to not only be gobbling up anything Action Sports related in the coming years, but to also help correct the negative balance sheets for many big brands such as ZQK. In 3-5 years, ZQK should be flat in USA, down in Europe and WAY up in Asia. The dawn of a new superpower (& Super-consumer) awaits….

    (this from a below average, white dood)

    • jeff
      jeff says:

      No doubt China is a huge and growing market. I hope some of their apparent problems with inflation and the transition from an export based to a consumer based economy don’t get in the way.


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