Phoenix Footwear Group Inc., the parent of Trotters and Softwalk, reported net sales in the second quarter rose 4.5 percent to $4.2 million, compared to $4.1 million for the second quarter of fiscal 2015.
Gross margin as a percentage of net sales improved 870 basis points to 36.8 percent, from 28.1 percent in the same quarter of the prior year.
Net loss for the second quarter decreased by $112,000 compared to the second quarter of the prior year. Net loss per share decreased to 4 cents per share compared to 8 cents per share in the second quarter of fiscal 2015. EBITDA for the second quarter of 2016 was a loss of $330,000 compared to a loss of $448,000 for the second quarter of 2015.
Net sales for the first six months of fiscal 2016 decreased 9.2 percent, to $9.7 million, from $10.7 million when compared to the first six months of fiscal 2015.
For the quarter ended July 2, 2016, net sales increased $184,000, or 4.5 percent, to $4.24 million compared to $4.05 million for the second quarter of fiscal 2015. Net sales for the quarter included growth in the company’s e-commerce, independent and internet-based channels of distribution that was offset by declines in other channels.
Net sales for the first six months of fiscal 2016 decreased $987,000, or 9.2 percent, to $9.7 million compared to $10.7 million for the first six months of fiscal 2015. Contributing to the lower net sales for the first six months was a decrease in sales to a large national retailer and a decrease in the company’s catalog channel of distribution, which was partly offset by increases in the company’s e-commerce sales and other internet-based retailers.
Gross profit increased $421,000, from $1.1 million to $1.6 million in the second quarter of fiscal 2016. Gross margins as a percentage of net sales for the second quarter of fiscal 2016 improved to 36.8 percent compared to 28.1 percent for the second quarter of fiscal 2015.
Gross profit for the first six months of fiscal 2016 increased $134,000, to $3.6 million, compared to $3.5 million during the first six months of fiscal 2015. Gross margin as a percentage of net sales for the first six months of fiscal 2016 improved to 37.4 percent compared to 32.7 percent for the first six months of fiscal 2015.
Contributing to the higher gross margin for the first three and six months of fiscal 2016 were the reduction in the inventory obsolescence reserve matched against the clearance of phased-out and discontinued goods together with the reduced air shipment of goods compared to the same periods in fiscal 2015.
SG&A for the second quarter and first six months of fiscal 2016 increased to $1.9 million and $4.1 million, compared to $1.6 million and $3.7 million in the three and six months of fiscal 2015.
Contributing to the increase in SG&A for the second quarter and first six months of fiscal 2016 includes planned additions in sales, marketing and distribution, along with planned increased spending supporting the company’s e-commerce initiative and other related advertising and marketing investments.
The company reported a net operating loss of $539,000, or 4 cents per share, for the second quarter, compared to a net operating loss from continuing operations of $651,000, or 8 cents per share, for the same period of the prior year.
For the first six months of fiscal 2016, the company reported a net operating loss from continuing operations of $737,000, or 6 cents per share, compared to a net operating loss from continuing operations of $690,000, or 8 cents per share, for the first six months of fiscal 2015.
The loss before interest, taxes, depreciation and amortization (EBITDA) from continuing operations for the first six months of fiscal 2016 was $329,400, compared to $55,700 for the first six months of fiscal 2015.
