Phoenix Footwear Group Delivers 3 Percent Revenue Gain In Q2

Phoenix Footwear Group, Inc., the parent of the Trotters, SoftWalk and Bueno footwear brands, reported sales of $4.4 million in the second quarter ended July 2, up 3 percent from $4.3 million in the second quarter of 2021.

The company, based in Carlsbad, CA, said that during 2021, due to the supply chain disruptions, the company received most of its spring merchandise later into the season in turn shifting sales into the second quarter.

In the first half of the current year, sales grew 31 percent to $8.9 million compared to $6.8 million in the first half of 2021. All three of the company’s brands delivered double-digit growth during the first half of 2022.

Gross margins for the second quarter increased to 45.0 percent, a 110 basis point improvement from the 43.9 percent recorded in the first quarter of 2021. Margin improvements have been as a result of the company’s sourcing migration to countries with more favorable duty rates combined with lean on-hand inventories, minimizing pressure for off-price sales and discounts.

Operating income for the fiscal quarter ended July 2, 2022, totaled $344,000, down from $581,000 a year ago. Net income for the period totaled $60,000, down from $299,000 a year earlier. Results for the period reflect a return to a normalized cost
structure as the company exited the pandemic.

For the first half of 2022, operating income totaled $639 thousand compared to $484 thousand for the comparable period
in 2021.

Phoenix also announced it had entered into a credit agreement with Alterna Capital Solutions, LLC, to provide it with a new senior credit facility for additional working capital. The company projects this new facility will cut its interest expense approximately in half.

Commented James Riedman, CEO, “As we expected, our rate of growth moderated during the second quarter as product deliveries stabilized compared to the prior year. Entering the second half of the year we have yet to see a material slowdown of demand for our brands in the marketplace, although we are managing our inventories cautiously. In the second quarter, we did deliver the first product under our license with Pendleton Woolen Mills. For the second half of this year, we expect Pendleton footwear will be a meaningful contributor of additional revenue.”