Phoenix Footwear Group saw a considerable sales gain, but income remained flat on less than expected revenue contributions from the newly acquired Altama footwear business. Phoenix acquired the brand in the second half of last year with expectations of leveraging its military footwear business, but contracts secured with the Department of Defense have since been delayed into the second half of 2005. This delay caused sales and profits in the division to slip, but Altama still remains slightly accretive to overall earnings.

Total company net sales increased 41.6% to $26.4 million in Q1, compared to $18.6 million for 2004. Gross margin fell 360 basis points to 40.1% due to Altama’s military business while SG&A expenses fell 260 basis points to 28.6% of sales for the same reason.

Altama's net sales for the first quarter dropped 43.2% to $6.8 million, compared to net sales of $12.0 million in 2004, prior to Phoenix’s acquisition of the brand. Phoenix believes that this sales decline “is a timing issue isolated to the second quarter.” Altama is trying to make up for the shortfall with efforts to expand its non-DoD business.

First quarter sales for Royal Robbins increased 29.2% to $8.7 million, compared to $6.7 million for the first quarter of 2004 due to an increase in its retail distribution points. The company stated that Royal Robbins currently has a “strong fall pre-book,” and expects the brand to continue posting strong growth in 2005.

SEW caught up with Francisco Morales, Royal Robbins president, who said that the company is seeing its strongest growth from its men’s segment, but women’s continues to be its largest category, with the split roughly 40/60 this year. Royal Robbins launched their watersports line at OR last year, and Morales said that it is doing “very well” for the company but consumers continue to want multi-functional apparel.

Morales said that the lion’s share of the growth throughout the quarter came from opening new doors through the specialty fashion distribution channel and gaining increased penetration at existing customers. Also, several outdoor retailers brought in Royal Robbins spring line early this year and sell-through has been strong enough so that the brand is already seeing re-orders.

Royal Robbins is beginning to experiment with the shop-in-shop concept at a few key accounts and the company is developing new fixtures and POP displays to support this for next spring. Morales said that his focus remains on increasing margins for the retailer and driving sell-through.

SoftWalk posted net sales for the first quarter of $4.2 million, a 5.8% increase over $4.0 million in 2004 while first quarter sales for Trotters decreased 27.8% to $4.5 million. Net sales for H.S. Trask increased 24.8% to $2.0 million compared to $1.6 million last year.