15 Feb Volcom’s Revenues Slide 4.7 Percent In 2017
Kering reported that Volcom recorded €230 million in revenue in 2017, down 4.7 percent as reported and down 3.2 percent at constant exchange rates.
Kering said in its quarterly report about Volcom, “Sales were firmer in the second half, however, inching up 0.2 percent on a comparable basis. As in 2016, operating conditions in the surfwear and action sport market remained very challenging, with major distributors in the United States suffering revenue declines which led them to streamline their store networks.
“Despite this tough operating environment, Volcom strove to protect the integrity and positioning of its brand by focusing on the quality of its distribution and product offering. It put in place numerous marketing and communications initiatives during the year, which had a very positive effect on fostering the brand’s appeal and reputation. Volcom recorded a further decrease in wholesale sales in 2017 (down 5.6 percent), but the decline was more contained on a same-store basis and trends improved towards the end of the year. Sales in directly operated stores advanced 6.4 percent.”
Revenue by Region
“Volcom’s sales are still highly concentrated on mature markets, especially North America, which in 2017 was once again the brand’s leading market, accounting for 63.2 percent of its total sales despite the region’s contraction in revenue. Western Europe contributed 19.1 percent to Volcom’s overall revenue for the year. Revenue by product category Volcom is currently focusing its investments and other efforts on the Apparel product category, which represented around 86 percent of its total revenue in 2017.”
Recurring Operating Income
“Volcom’s recurring operating income was at break-even for 2017, whereas in 2016 it recorded a recurring operating loss of €3 million. This turnaround is a real achievement given that sales retreated by €12 million (on a reported basis), and was due to Volcom’s persistent efforts to reduce its cost base and streamline its organizational structure. Store network and operating investments in Volcom’s directly operated store network comprised 86 stores as of December 31, 2017, including eight in emerging markets. This represents 16 more points of sale than as of December 31, 2016, primarily due to opening or taking over shops-in-shops within department stores in Europe. Volcom’s gross operating investments amounted to €7 million in 2017, €1 million lower than in 2016.”