Spy Inc. reported net sales increased by $700,000, or 8 percent, to $9.9 million for the quarter ended Sept. 30, 2012, as its reinvigorated line of Spy-branded sunglasses and goggles racked up double-digit growth despite the tough sell-in environment for winter sports vendors.


Sales of Spy-branded products increased by $1.4 million, or 17 percent, to $9.8 million, compared with core Spy brand sales of $8.4 million in the year earlier quarter, when they grew 25 percent. Other sales of approximately $100,000, consisted of licensed brand products which are no longer a focus of the company, compared with licensed product sales of $800,000 during the quarter ended Sept. 30, 2011.

“We are especially pleased that we were able to grow our North American snow goggle and sunglass businesses because of such a poor snow season last year that we believe caused many of our retailers to have relatively high inventory levels going into this 2012 fall snow goggle buying season,” said Michael Marckx, president and CEO.


The company incurred a net loss of $1.8 million during the quarter, down significantly from the $3.0 million loss reported for the quarter ended Sept. 30, 2011. The improvement was primarily due to higher gross margin, which shot up 820 basis points to 43.5 percent of net sales.


General and administrative expenses declined due to the absence of legal and consulting expenses incurred a year earlier during a management restructuring. Those savings were offset by increased sales and marketing expenses as the company ramped up Spy’s promotional budget. Operating expenses in the more recent quarter also included $700,000 related to layoffs and a shift from a direct model back to a third-party distributor in Europe. The changes
are intended to lower the future breakeven point on an operating basis.