LaCrosse Footwear, Inc. reported sales for the second quarter ended June 25 edged up 1.9 percent to $27.1 million as sales growth in the companys Outdoor offset declines in the Work market, which were fueled by military contract order declines and the shuttering of the companys workwear unit.
The company recorded a net loss of $185,000, or 3 cents per share, in Q2, compared to net income of $101,000, or 2 cents per share, in Q2 2010. Sales in the Outdoor market were up 18.2 percent to $9.4 million in the second quarter of 2011.
Management said the increase in outdoor sales primarily reflects strong demand for hunting and hiking products. Sales in the Work market were $17.6 million in the second quarter of 2011, down 5.1 percent from the comp period in 2010, reflecting a reduction of contract orders from the U.S. military and the company’s decision in 2010 to discontinue its work apparel products, according to management. Excluding the contract military and the work apparel sales, Work market sales in the second quarter of 2011 increased 17 percent from the same period in 2010. Gross margins for the quarter were 38.5 percent of sales, down 240 basis points from 40.9 percent in the year-ago period.
Company management said the decrease in gross margins primarily reflects an increase in closeout sales of discontinued work apparel products. The company’s inventories were $53.4 million at the end of the second quarter of 2011, up from $26.4 million at the end of Q2 2010. Management said the year-over-year increase in inventory reflects low inventory levels in the second quarter last year due to supply constraints and a strategic decision in 2011 to enhance the availability of core products in order to address future at-once demand, the growth of the company’s wholesale distribution network and preparedness for its U.S. military business.
In a statement, company President and CEO Joseph Schneider said sales in the Outdoor market continue to be very robust as LaCrosse strengthens its relationship with retailers. We see strong demand for both our core Work and Outdoor products, and our newest products for Fall 2011 are being very well received, including our innovative retooling of classic Danner designs in our new Stumptown series, he added.
