Billabong Records A $77 Million Loss

Billabong has posted a full-year net loss of $77.1 million, triple the amount of last year’s $23.7 million loss.

The Australian surf fashion retailer reported this result after slashing the value of its goodwill and brands such as Von Zipper, Kustom, Xcel and RVCA by $106.5 million.

The company’s earnings before interest and tax (EBITDA) increased 0.3 per cent to $51.1 million, which chief executive Neil Fiske attributed to strong performance in the Americas.

“This result marks a turning point for the company, and one on which we can build,” Fiske said.

“We had three core objectives for the second half: continue the turnaround in our largest market of the Americas, expand comparable gross margins across all of our regions – a key indicator of brand health – and reduce the cost of doing business. We hit all three of those targets.”

However, the company’s EBITDA still failed to meet market forecasts of $56 million as well as Billabong’s own guidance of $52-57 million.

Fiske said while the American markets “turned the corner”, the less enthusiastic Australian market “dragged on the result”.

“Retail comparable store sales were down 5 per cent and retail gross margins were behind financial year 2016 by 210 basis points due to higher promotions and clearance markdowns,” said Fiske in a statement to the ASX.

Comparable store sales dropped by 2.4 per cent, but retail sales from bricks-and-mortar and online grew 0.1 per cent for the year.

Billabong shares were down 2 per cent to 73.5 cent on Wednesday morning, with no dividend declared.