Heelys Q2 losses widen as sales slump

US: Heelys Q2 losses widen as sales slump

By Petah Marian | 9 August 2012

Q2 net losses widened to US$1.7m
Net sales fell 31.3% to $5.7m
Gross margin down to 38.5% from 46.9%

Wheeled shoe maker Heelys saw second-quarter net losses widen as the company continued with restructuring efforts.

The company said net losses reached US$1.7m over the quarter ended 30 June from $1.1m in the same period of the prior year.

Net sales fell 31.3% to $5.7m, while domestic sales declined 33.3 to $1.8m. The company attributed the decline in domestic sales primarily to comparisons with higher sales in the second-quarter of 2011, as well as lower inventory replenishment orders.

Gross margin declined to 38.5% from 46.9% due to changes in product and customer mix, with a larger percentage of global sales coming from lower priced shoes sold at smaller margins, increased discounting in Europe, Japan and Germany.

The company continued to progress with its restructuring plans, closing its Belgium office at the end of June. Heelys said it has recorded $457,000 in severance and one-time benefit costs, $92,000 in contract termination costs, and $185,000 in other costs relating to the closure.

Sectors: Finance, Footwear

Companies: Heelys