Australia's Billabong wiped out by profit warning
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Shares in Australian sportswear company Billabong International plunged more than 40 per cent on 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 was trading 42 per cent lower at Aus$2.11 late in the session.
"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.
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