NEW YORK (TheStreet) - Quiksilver (ZQK), the California action-sports clothing brand that used to be all the rage when Gen-X kids were still skateboarding, was wiping out Tuesday after reporting a disastrous second-quarter earnings.
Revenue for Huntington Beach-based Quiksilver was $408 million, well short of the $448 million consensus estimate of Wall Street analysts as compiled by Bloomberg. Shares were plummeting 44% to $3.23
Having once been the quintessential clothing brand in action sports in the late 1990's and early 2000's, Quiksilver may be falling victim to 'fast fashion' and declining brand popularity. Quiksilver may also have erred in cutting prices to increase volume, wrote Piper Jaffray analyst Erinn Murphy in a June 3 investor report.
"While this strategy could mitigate initial markdown risk and could support sales volume, it appears more defensive and we believe is yet to be proven," Murphy said, cutting Piper Jaffray's 12-month price target on the shares to $4 from $7.