Quiksilver, Back in Fashion, Sees Profit Zoom

COSTA MESA — Riding a wave of revived demand for its beachwear and other fashions for young men, Quiksilver Inc. said Wednesday that its annual profit improved more than tenfold from a year ago. Citing cost controls, the company said its net income increased to $4.4 million, or 69 cents a share, for the fiscal year ended Oct. 31, compared to $371,000, or 5 cents a share, in fiscal 1992.

Sales increased 6% to $94.6 million, compared to $89.3 million a year ago. For the fourth fiscal quarter, the company reported net income of $916,000, or 14 cents a share, compared to $139,000, or 2 cents a share a year earlier. Sales increased 21% in the fourth quarter to $24.7 million from $20.5 million a year ago.

“In terms of a turnaround, I wouldn’t say we’re done,” said Robert B. McKnight Jr., chief executive of Quiksilver. “But we’ve definitely improved the earnings with our cost controls. We’re not there yet. We want a lot more.”

In mid-1992, Quiksilver went through the turmoil of layoffs and a change in top management with the resignation of President Sha-heen Sadeghi. Randall Harrell, then chief financial officer, became president and chief operating officer.

Quiksilver, which had ridden a wave of demand for the rough-hewn, surfer-lifestyle fashions of the 1980s, saw its sales drop to 1989 levels last year; its fiscal 1992 earnings were the worst since the company went public in 1986.

“We rode beachwear hard until the fashion statement fell out,” McKnight said. “It went out of vogue about three years ago and people said beachwear was dead. But your basic, classic California beachwear is definitely coming back, whether in ads, TV shows or styles.”

McKnight said the company focused on keeping its staffing levels in line with sales demand and picked up on alternative style trends, such as snowboarding, but avoiding dependence on any single fashion.

“Their business in the United States has improved the most,” said John S. McCartney, analyst for Branch, Cabell & Co., an investment bank in Richmond, Va. “They are a much better-run company than they were two years ago.”

The company has 175 U.S. employees, another 125 in Europe and will be adding about 30 from its acquisition in October of women’s swimwear maker Raisin Co. in San Juan Capistrano.