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Quiksilver's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Our e-commerce business is rapidly growing driven by the teenagers who love our products, who live online and who are connected by the Internet and social media. And our 3 great brands, Quiksilver, Roxy and DC continue to resonate with consumers and grow in popularity. Even through the first fiscal quarter -- I'm sorry, even though the first fiscal quarter is historically our smallest seasonal quarter of the year, we're off to a good start, solid start to fiscal 2012, and we remain solidly on track to deliver our long-term plans.

Let me turn now to the high level of financial highlights from the first quarter. Revenues in the first quarter were $415 million, up 6% when compared to last year reflecting the improvements we've made to our global retail business, as well as the broad appeal for our products, all this despite the late arrival of winter in several key markets. And additionally, our e-commerce business continued its strong growth with revenues up sharply in each of our 3 regions. Gross margins declined 170 basis points to 50.7% of sales, the result of higher sourcing costs and an increase in the amount of clearance business.

The pro forma SG&A of $229 million was 90 basis points higher as a percentage of sales than the first quarter 1 year ago as we continue to invest in our long-term growth initiatives ahead of revenues. The resulting pro forma adjusted EBITDA in the first quarter was $20 million, which was better than our expectations when the quarter began.

I'd now like to take you on a brief tour of our regions providing some brand updates along the way.

Starting with the Americas. Our business continues to thrive. Sales in our owned retail stores comped up 11% in the first quarter, continuing a long string of solid same-store sales performance. Each of our brands performed well at retail, and we're especially encouraged by the continuing recovery of the Roxy brand, whose best performing categories in the first quarter were swim and sportswear. The Americas e-commerce business delivered strong performance through the holiday selling season and was up roughly 50% over last year.

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