Initial Thoughts on Volcom

VLCM - Reported earnings today that blew out estimates. It was nice to see. However, they lowered the outlook below consensus for next quarter. I haven't listened to the call yet so I am not as informed as I would like to be at this time, but my inital thoughts from the other items on the press release are as follows. Gross margins down = Bad. I believe this was partially due to the company working through alot of its excess inventory. With a $3 mil downtick from Q4 in inventory I think they have got inventories at a much better level. Also look at the cash flow generation this quarter - Incredible. Even though the stock may get clipped a bit tomorrow, I think they are in a much better position than in Q4. Overall, not bad. Will update once I read the call.