Hurt by sourcing delays and weakness in Japan, Heelys Inc. reported a loss of $1.2 million, or 4 cents a share, in the first quarter, flat to the loss it incurred in Q1 last year.
Sales decreased 7.6 percent to $6.1 million versus the prior-year period.
Domestic sales slid 10.5 percent to $1.7 million. Year-ago sales were boosted by sales to a discount retailer at lower average price per pair that did not reoccur in the 2011 quarter. U.S. sales were also impacted by $500,000 in orders pushed into the second quarter as a result of short-term delays from one of the companys factories.
International sales decreased 4.4 percent to $4.4 million, primarily due to sales losses in Japan resulting from its takeover of distribution in Japan and the March 2011 earthquake and tsunami. Decreases in France and Germany were offset by significantly higher sales in Italy and Russia.
Gross margins increased to 49.3 percent of sales from 47.9 percent in Q1 2010, primarily reflecting 2010’s special sale to a discount retailer. Margins also benefited from costs saved from changes in its procurement processes.
“Positive momentum from improved sell through at retail during the holidays was countered by extreme delays in getting new product out of China and shipped to our retailers,” explained company CEO Tom Hansen.
