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i could not agree with you more,
but then again i'm in the business as well. i've got
a little bored of trying to sing the obvious
virtues of this company to those who refuse to be open
minded. i was out in the warehouse of my company today
and saw them unpacking the quik bubble
vests[insulated]. i'm so nervous, who will we possible sell them
to[sarcam for those who don't get it]. yeah, that's right
quik and roxy sweaters, vests, and fleece
absolute layups [that means money in bank]. QUIK AND ROXY
ARE HOT WHEN IT'S WARM AND HOT WHEN IT'S COOL.
Just came in from the pool, and had a little
extra time...I hope you'll bare with me. The reason I
didn't go to the Hamptons for the weekend was because I
rented my home to some guy from Manhattan. Boy, did he
Now, onto business.
concede the leaders of branding all things life style
oriented is Costa Mesa, California based Quicksilver.
Roxy, the company's junior division has seen sales zoom
from 25 million in 97, to an expected 100 million+
this year, nearly a quarter of the company's total
sales, by putting its logo on sneakers, purses, perfume
and even luggage. 'They're the ones who do it best,'
said Liz Melissa, cheif swimwear buyer 338-STORE
PACIFIC SUNWEAR CHAIN."
"The company's growth is
worldwide. The surge has drawn the attention of financial
analysts such as John Olinski of Newport Beach, California
based Cruttenden Roth. Olinski said, 'The Quicksilver
brand remains under penetrated in department stores and
non-core markets, creating solid, long-term growth
I think I'll use the rent-money to add to
my ZQK position.
ZQK / INDUSTRY
Quick 1.34 / 1.24
>better than industry, but still below
Currient 2.32 / 2.68
>below industry, needs
improvement to +2.5
LT Debt to Equity 0.20 / 0.43
>excellent, double industry
Tot Debt to Equity 0.43 /
>better than industry, close to 50% but OK if
up in good Return on Equity ratio - yes
in this case.
Interest Coverage 13.27 /
>lower than industry, but still above
I have no real concerns here. Within or better than
industry. Further, better than ratios of best fit
competitors (TOM NAUT KWD SMI RL).
on financing, but I'll have to get back to you
later on that one - got to do some homework tonight on
some buy op's after the last two days.
tomorrow or next. Nuvo's OK by me - someone has to be the
neg guy. Keeps us longs from getting complacent.
Thanks for the excellent post. The facts appear
to have silenced the negative spin on inventory, or
maybe the big house for rent on the beach doesn't have
phone lines so no internet access for Mr. professional
Do you have any ideas on the
company's credit and borrowing? Is that also in line with
the industry averages? Thanks for any insight.
I'll wave next time I sail the schooner by, or
maybe show a manhattan salute. Seriously, loose the
arrogance - you won't endear yourself to the locals
there...you know how they feel about outsiders...and you'll
always be an outsider...I fortunately don't have this
LETS TALK INVENTORY - We don't have access to monthly
inventory data; the best we can do is quarterly/annual. An
MBA Refresher (nice to have one), best tool for
inventory analysis from financial statements
Inventory Turnover(IT) = Cost of Goods Sold/Average
IT shows # of times avg. inventory is
sold during a period. Higher # is more efficient
management of inventory. However, there are several caveats
to keeping small inventories to achieve high ratios,
>incurring larger ordering
>losing quantity discounts
>and most importantly,
losing sales due to lack of inventory.
with a higher sales growth rate will have a marginally
lower IT ratio then the industry average, because it
seeks not to loose sales. The other ratio is Asset
Turnover(AT)=Net Sales/Average Assets. AT measures the efficiency
with which a company uses its assets to generate sales
(remember, inventory is an asset). Higher AT is more
efficient. Now for some #'s:
IT Industry = 4.36 ZQK=
3.47 [TTM 4/99]
AT Industry = 1.60 ZQK=
>ZQK's IT was 2.68 on TTM 10/98, and now up to 3.47 in 6
>Inventory was $67.11M at 4/99, lowest in three
>Quarterly IT ratio of 1.13 is best in last 5Q
>As a percent of Assets, inventory is 38%, lowest
ratio in last 5Q (51,44,48,42).
There is no inventory issue here. IT ratio is inline
with industry given sales growth rate, and the ratio
has been improving. Excess US Inventory is unloaded
overseas at market, per the annual report.
"As for the
rest of your message, you might want to take a few
writing courses. Or is all that nonsense merely a coverup
for your inability to provide a good argument." Now
where did I read that? Got the above meaningful
discourse in your bag? So put your $ where your mouth
is...sell the stock short. I'll stay long thank
Enough BS city boy - truce I say.
I indicated that I live on the East Coast, not
Long Island. Actually, I was referring to Nordstroms
at Tyson's Corner, VA. I'm sure that if you were to
call the buyer she/he would tell you the same thing.
Quiksilver is hot here in Northern VA! As for my identity,
I'm into holistic medicine, i.e., I would much rather
take herbs to cure certain ailments instead of
prescription drugs. The Chinese and Europeans have been doing
this for centuries and Americans are just beginning to
discover the benefits of herbs (although I'll be the first
to admit there are some herbs that are dangerous).
Maybe you should try Kava Kava.
ZQK is all over the place (not just So. Cal) and
as anyone who listened to the conference call knows,
major growth is coming from Europe: France, Spain,
As far as the comment on
fleeces and sweaters, give me a break.
I am not arguing that ZQK is or is not hot right
now in CA. I am wondering about where they will be
one year from now. You say that the new fall line is
sizzling, mentioning cargo pants and fleeces and sweaters.
Cargo pants seem to have peaked. I got my first pair in
February. Now I see them all reduced. By September, they
probably won't be a great selling item. As for sweaters
and fleeces, do Southern Californians wear sweaters
at any time during the year? I am really not that
sure. I have been as north as San Jose and damn was it
hot in the Fall. Last thing I'd be doing was putting
on a sweater. Anyone have any input?