Phoenix Footwear Group, Inc., the parent of the Trotters, SoftWalk, Bueno, Los Cabos and Pendleton footwear brands, reported sales of $4.7 million in the second quarter ended July 1, up 5.2 percent from $4.4 million in the second quarter of 2022.
The company, based in Carlsbad, CA, said that during the second quarter, it continued to generate growth in Trotters and Bueno, while Softwalk was flat. In 2022, due to supply chain disruptions, Phoenix Footwear Group received most of its spring product later into the season, in turn shifting sales into the second quarter.
Gross margins for the second quarter declined 730 basis points to 37.6 percent of sales from the 44.9 percent recorded in the second quarter of 2022. Margins for the quarter were “significantly impacted” by the final sale of discontinued inventory of the company’s Sava brand.
Operating income for the fiscal quarter ended July 1, 2023 totaled $31,000, down from $313,000 in the year-ago quarter.
In the second quarter, the company posted a net loss of $195,000, or a penny per share, compared to net income of $60,000, or zero cents, in the Q2 period last year.
In the first half, sales grew 13.3 percent to $8.9 million compared to 31 percent growth and $8.9 million in revenues in the first half of 2022. First half operating income totaled $241,000 thousand, compared to $639,000 for the comparable H1 period in 2022.
“We are encouraged by our continued growth as we head into the second half of 2023. Despite an uncertain retail landscape, our team delivered 13 percent growth for the season, and we remain optimistic about the outlook for fall, commented James Riedman, CEO of Phoenix Footwear Group. “We are in the midst of an initiative to migrate some of our fulfillment to a third-party facility, and our actions liquidating inventory during the quarter are part of this effort. While impacting us negatively in the near term, this effort should lead to significantly improved margins over the longer term.”
Inventories were up 27.2 percent to $9.5 million at quarter-end from $7.5 million at the end of Q2 last year.
Photo courtesy Los Cabos
