Fashion United: Billabong International Ltd. fell by a record in Sydney trading after the Australian surf-wear maker said first-half profit may fall as much as 26 percent, dragged down by a review of its capital structure. “The sales growth trend has deteriorated significantly in this critical retail period,” Billabong said. As the group explained in a note on Monday, based on preliminary sales data to 11 December and assuming a 
continuation of current trends, it is now anticipated that sales revenue for the six months to 31 December will be approximately 5% higher than the pcp in constant currency terms (down approximately 3% adjusting for the impact of acquisitions). “The reasons for the sales slowdown vary by region, but the data received reflects the European sovereign debt issues and the ensuing fears of global recession which are impacting consumer confidence and spending patterns significantly,” they advanced. The gloomy forecast comes less than two months after Billabong predicted a “strong” rise in earnings. The stock slumped 44 per cent to A$2.03 at the close of trade, the largest drop since it was listed in 2000. The decline cut Billabong’s market value to A$518 million ($514 million or Rs 2,771 crores), compared with A$1.5 billion as of the June 30 fiscal year end. At a current price of $2.15 per share, Billabong has a market cap of $540 million (Rs 2,911) and an enterprise value — market cap plus net debt —of just over one billion. Following company’s report, sales hindered in the company’s three key markets amid a cool start to the Australian summer, a drop in European demand and a decline in December sales in North America amid concern an economic recovery may weaken. “This is what happens when you guide to profit growth and come out with a completely different result,” said to Business Week Peter Esho, Sydney-based chief market analyst at City Index, a London-based provider of trading services in bond, stock and commodities markets. “It really diminishes trust with the market to have such a turnaround in performance. Read Full: Billabong slides 40% after cutting down profit forecast - Fashion - news - Fashion News India, jobs, network, apparel, business
