The share price of struggling surfwear retailer Billabong International Limited (ASX: BBG) has taken a 12% plunge today following the release of its full year results to the market.

Although Billabong reported a 4.5% lift in revenue to $1.1 billion, the company posted a $23.7 million loss compared to a $4.5 million profit in FY 2015. Management has pointed to a $20 million increase in income tax charges as being largely to blame for the poor result.

However it is worth noting that earnings before interest, tax, depreciation, amortisation, and impairments (EBITDAI) fell 9.7% to $49.8 million from $55.2 million despite the lift in revenue. The company’s EBITDAI margin dropped from 51.7% to just 45.2% for the period, with higher input costs and the clearance of excess inventory behind much of the decline.

The disappointing performance of its European segment is a big concern in my opinion. Despite positing a 7.2% increase in European revenue to $192.7 million, reported segment EBITDAI fell 63.2% to just $9.5 million.

In my opinion this result demonstrates just how tough things are getting for the surfwear retail industry. An incredibly disappointing performance by fellow surfwear retailer Surfstitch Group Ltd (ASX: SRF) in the last 12 months has its shareholders nursing an 87% decline in the value of their holdings, with Billabong shareholders not far behind now with a 45% decline in 2016.

Whilst bargain hunters might be tempted to invest following these sharp declines, I personally would recommend keeping away from them both as things may yet get worse before they get better. Instead I feel there are plenty of better options in the retail industry to focus on such as Kogan.com Ltd (ASX: KGN) or JB Hi-Fi Limited (ASX: JBH).

Alternatively, these three new breed blue chips could prove to be great investments. Each have growing earnings and dividends, with the potential for share price gains in the next few months if you ask me.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.