Billabong shares wipeout
SHARES in surf and skate wear company Billabong have crashed after the company warned that its sales growth had significantly deteriorated in the months to December, forcing it to issue a blistering profit downgrade.
Billabong warned this morning in a statement to the ASX that it expected sales for the six months to December 31 to be down 3 per cent on a like-for-like basis while pre-tax earnings for the period would be in the range of $70 million to $75 million against $94.6 million in the previous year.
Billabong shares collapsed this morning and were recently down $1.33, or 36.5 per cent, at $2.31, marking their biggest drop since the company went public in 2000.
Its warning comes as rival Quiksilver said at an earnings briefing last week that trading conditions were proving increasingly tough with the key market of Australia showing recession-like conditions.
It is also the second major retailer to recently issue a profit warning, with JB Hi-Fi last week slimming its earning forecasts as it too faced a tough lead into Christmas and the new year.