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Billabong swings to full-year loss, sales up 4.6 percent

By Prachi Singh

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Business

Billabong International’s total Group sales were 1.1 billion Australian dollars (839 million dollars), up 4.6 percent for the full year to June 30, 2016. Sales were down 1.4 percent on a constant currency basis. The company said, its big three brands continued to grow in global wholesale equivalent revenue - up in total by 5.3 percent for the year. Billabong was up 1.9 percent, Element 5.3 percent and RVCA 18.1 percent on a constant currency basis. However the company reported a net loss of 23.7 million Australian dollars (18 million dollars) compared to a profit of 4.2 million Australian dollars (3.2 million dollars) in the previous year.

Commenting on the company’s annual performance, Neil Fiske, Chief Executive of Billabong said, "The Group has made significant progress in the last year. The big three brands Billabong, Element and RVCA all grew and gained share in key markets, we improved the cost base and simplified the business further, and comparable retail revenue increased with ecommerce sales up 52 percent. Against a backdrop of global uncertainty and industry change, we continue to focus on the levers within our control, including inventories, initiatives to lift margins, cost of doing business (CODB) and quality distribution.”

Reports decline in EBITDA

Net loss after tax, including significant items and discontinued businesses, was 23.7 million Australian dollars (18 million dollars) compared to a profit of 4.2 million Australian dollars (3.2 million dollars) for the prior year. EBITDA excluding significant items and discontinued operations, was 57.5 million Australian dollars (43.8 million dollars), down from 65.7 million Australian dollars (50.1 million dollars) in the previous comparative period. For the second six months of the year EBITDA excluding significant items and discontinued operations was 20.3 million Australian dollars (15.4 million dollars), down from 22.9 million Australian dollars (17.4 million dollars) in the prior year period.

In the Americas, EBITDA before global allocations was 31.6 million Australian dollars (24 million dollars) for the year, a decline of 10.1 million Australian dollars (7.7 million dollars). Total comparable direct to consumer revenues increased slightly with ecommerce growing 24.9 percent on constant currency, whilst comparable store sales fell 6 percent for the year. Total external wholesale revenues fell 2.7 percent weighed down by Sector 9.

EBITDA for the Asia Pacific region was 38.8 million Australian dollars (29.5 million dollars) before global allocations compared to 43.1 million Australian dollars (32.8 million dollars) last year. Overall sales for the region were down 0.8 percent on a constant currency for the year with comparable store sales in Australia up 2.6 percent for the year for mono-brand stores and down 1.3 percent for multi-brand. During the financial year 15 new retail stores were opened.

Europe improved its EBITDA result for the third successive year. European EBITDA of 16.9 million Australian dollars (12.8 million dollars) before global allocations was up from 11.3 million Australian dollars (8.6 million dollars) last year. Total revenue in the region grew 2 percent on constant currency.

The company said that Group’s results for the 2017 financial year will again be significantly influenced by the strength of the key November/December retail trading in Asia Pacific and the implications of the consolidation and rationalisation occurring in the North American retail market.

Pictures:Billabong

Billabong