Costa Mesa, Ca - Volcom, Inc.announced that for the second quarter ended June 30, 2007, total revenues increased 25% to $57.7 million, compared with $46.1 million in the second quarter of 2006.
“We continue to see strong demand for the Volcom brand across all channels of distribution,” said Richard Woolcott, Volcom’s president and chief executive officer. “Our other key focus has been our European operations that are now up and running. We believe we are on track for a solid year.”
Gross profit as a percentage of total revenues for the second quarter of 2007 was 48.2%, compared with 49.8% in the second quarter of 2006, primarily reflecting initial shipments to Europe that contained low margin sample product.
Selling, General and Administrative expenses for the quarter were $18.9 million versus $13.2 million in the comparable period last year as the company continued its investment in building its European infrastructure to take direct control of the brand in the region in the second half of the year.
Operating income for the second quarter of 2007 was $8.8 million, compared with $9.7 million for the second quarter of 2006. Operating margin was 15.3% for the second quarter of 2007, compared with 21.0% in the second quarter of 2006.
As previously reported, the company incurred pretax losses related to its recently established European operations of approximately $2.4 million in the second quarter, equal to approximately $0.06 per diluted share.
Net income for the second quarter of 2007 was 6.2 million, or $0.25 per diluted share. This compares with $6.5 million, or $0.27 per diluted share for the second quarter of 2006.
2007 Third Quarter and Full Year Outlook
Reflecting the acceleration of certain revenue recognized in the second quarter and the deferral of some expenses to the third quarter, the company currently expects revenues to be approximately $89 million to $91 million and fully diluted earnings per share to be $0.53 to $0.55 in the 2007 third quarter.
Based on current visibility regarding the remainder of the year, the company is reaffirming its 2007 revenue guidance of an increase of 34% to 36% over 2006, equating to total revenues ranging from $275 to $280 million. Additionally, the company is maintaining its previously issued diluted earnings per share guidance for 2007 at a range of $1.47 to $1.50.
About Volcom, Inc.
Volcom is an innovative designer, marketer and distributor of premium quality young mens and womens clothing, accessories and related products. The Volcom brand, symbolized by The Stone, is athlete-driven, creative and forward thinking. Volcom has consistently followed its motto of “youth against establishment,” and the brand is inspired by the energy of youth culture. Volcom branded products are sold throughout the United States and internationally.