Head NV reported unaudited net sales of €9.1 million ($11.8 mm) in the second quarter ended June 30, up 3.3 percent from the same period a year earlier as growth in its Racquet Sports division more than offset declines in its Winter Sports and Diving divisions.
Adjusted operating loss for the quarter declined to €4.08 million ($5 mm) due to the higher sales and gross margins, which barely offset higher selling and marketing costs. Net loss for the period was €3.57 million ($5.0 mm) compared to €7.84 in the comparable 2012 period.
Winter Sports sales for the quarter by 2.2 percent to €9.1 million ($12 mm) from the same period in 2012, but that bookings for the upcoming season are running about 10 percent ahead of their level of a year ago.
The January to June period is not a key delivery period for the division and consists mainly of close out sales relating to the 2012/13 season and some deliveries of bindings under contract manufacturing agreements for the next season.
The company described the sell-in for the 2012/13 season as challenging due to the very mild winter and late snow in both Europe and North America last winter. While participation grew as snow conditions improved in late December, it did not spur retails sales as cautious consumers opted for rental skis, the company said.
“Overall, whilst retailers are still somewhat cautious, our bookings at this stage for the 2013/14 season have improved compared to those achieved in the same period in 2012 by around 10 percent, but have yet to recover to the levels achieved in either 2010 or 2011,” the company reported in its interim financial report.
In Racquet Sports, Head saw second quarter sales increase 5.6 percent to €39.1 million ($51 mm) due mainly to higher tennis ball volumes particularly in North America.
Diving sales dipped 1.6 percent to €15.4 million ($20 mm) during the quarter as cold weather continued economic uncertainties in Europe more than offset growth in North America and Asia.
Sportswear sales increased 10.8 percent to €1.4 million ($2 mm) during the quarter, while Licensing revenues increased 26.5 percent to €1.3 million ($2 mm).
Head N.V. did not provide gross margin figures for the quarter but reported they rose 100 basis points to 40.9 percent s for first six months of the year due primarily to lower cost of sales for bindings and tennis balls.