05 Aug Phoenix Footwear’s Q2 Sales Expand 24 Percent
Phoenix Footwear Group, Inc., the parent of Trotters and SoftWalk, reported net sales from continuing operations for the second quarter increased $831,000 or 24.2 percent to $4.3 million compared to $3.4 million for the second quarter of fiscal 2013.
Consolidated net loss from continuing operations for the second quarter was $375,000 or $0.05 per share compared to a net loss of $359,000 or $0.05 per share during the second quarter of fiscal 2013.
Net sales from continuing operations for the first six months increased 8.1 percent to $10.0 million compared to $9.2 million for the first six months of fiscal 2013.
Consolidated net loss from continuing operations for the first six months of fiscal 2013 increased to $195,000 or $0.03 per share compared to a net loss of $91,000 or $0.02 per share for the first six months of fiscal 2013.
While the Company generated significant increases in revenue during the quarter, sales from sandals did not materialize as the Company had expected. As a result, the Company moved aggressively during the quarter to liquidate certain seasonal inventory which adversely impacted Gross Margins compared to the prior quarters.
SECOND QUARTER AND FIRST SIX MONTHS OF FISCAL 2014
For the quarter ended June 28, 2014, net sales increased by $831,000, or 24.2 percent to $4.3 million compared to $3.4 million for the second quarter of fiscal 2013. Net sales for the first six months of fiscal 2014 increased $752,000, or 8.1 percent to $10.2 million compared to $9.24 million for the first six months of fiscal 2013.
The increase in net sales for the quarter and first six months of fiscal 2014 was primarily driven by sales of licensed footwear introduced during Spring 2014, together with increased sales to the Company’s internet and national retail customers.
Gross margins for the second quarter of fiscal 2014 declined to 33.0 percent compared to 37.1 percent for the second quarter of fiscal 2013. Gross margin for the first six months of fiscal 2014 decreased to 35.2 percent compared to 37.0 percent for the first six months of fiscal 2013. Lower gross margins for the second quarter and first six months of fiscal 2014 were a resulted of an increase in sales of off-priced goods, and sales of lower margin licensed footwear.
SG&A for the second quarter of fiscal 2014 increased to $1.59 million or 9.4 percent compared to $1.45 million for the second quarter of fiscal 2013. SG&A as a percentage of net sales decreased to 37.2 percent for the second quarter of fiscal 2014 from 42.1 percent when compared to the same period of fiscal 2013. SG&A for the first six months of fiscal 2014 increased to $3.36 million compared to $3.13 million for the first six months of fiscal 2013. SG&A as a percentage of net sales decreased to 33.6 percent from 33.8 percent when compared to the same period of fiscal 2013.
The increase in SG&A for the second quarter and first six months of fiscal 2014 is attributable to the Company’s launch of Grey’s Anatomy footwear and expenses directly related to the increase in sales, including commissions and warehouse activity.
The company reported a net operating loss from continuing operations of $366,000 or $0.05 per share for the second quarter, compared to a net operating loss from continuing operations of $359,000 or $0.05 per share for the same period of the prior year.
For the first six months of fiscal 2014, the company reported a net operating loss from continuing operations of $195,000 or $0.03 per share, compared to a net operating loss from continuing operations of $91,000 or $0.02 per share for the first six months of fiscal 2013.
Earnings before interest, taxes, depreciation and amortization (or “EBITDA”) from continuing operations for the first six months of fiscal 2014 was $259,600 compared $397,100 for the first six months of fiscal 2013.