Shares in iconic Australian sportswear company Billabong International plunged by almost half Monday after it issued a profit downgrade blamed on the European debt crisis.
The surfwear and sports apparel maker, which owns its flagship brand Billabong and others including Von Zipper, Nixon and Tigerlily, forecast a decline in earnings for the first half of the current financial year.
It now expects earnings before interest, tax, depreciation and amortisation (EBITDA) of Aus$70-75 million (US$69-74 million) in the six months to December 31, 2011, down from the previous corresponding period's Aus$94.6 million.
Investors dumped the stock, which closed 44.2 percent lower at Aus$2.03.
"Europe is by far the group's most challenging market, followed by Australia," Billabong said.
"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."
Australian sales were hit by unseasonably cold summer weather.
Billabong said it was not able to provide guidance for the full financial year given the poor macroeconomic and trading environment.
Copyright 2011 AFP Asian Edition
