Struggling surfwear retailer Billabong has downgraded its full-year earnings guidance after its first-half loss widened to $16.1 million.
The Gold Coast-based retailer said on Friday it expects full-year earnings before interest, tax, depreciation and amortisation of between $52 million and $57 million.
Billabong's previous guidance was for earnings of between $60 million and $65 million, but it revised the figures following this week's $60 million sale of swimwear brand Tigerlily to Crescent Capital.
Billabong's total revenue for the six months to December 31 dropped 9.6 per cent to $511 million, pushing its loss out from $1.6 million in the prior corresponding period.
The group said it had a weak October with comparable store sales down 16 per cent in Australia.
However, comparable sales improved during December to rise 0.9 per cent.
For the entire six months, comparable store sales declined 4.2 per cent in Australia and 3.7 per cent for the group's Asia Pacific market.
The company said full-year earnings will rely heavily on the second half, when the Americas business is expected to pick up significantly following the region's comparable bricks-and-mortar sales growth of 0.5 per cent in the first-half.
Chief executive Neil Fiske said the results were consistent with the company's warning in November that the first half would be substantially down but that the second half would improve.
"There is a strong profit lift in the Americas as we enter its seasonally bigger second half," he said.
"Gross margins in the region were up 170 basis points overall year-on-year."
He said this combined with reduced costs and better inventory gives him confidence in the second half.
BILLABONG"S HY LOSSES WIDEN
* Net loss $16.1m vs $1.6m loss
* Revenue down 9.6pct to $511m
* No interim dividend
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