LaCrosse Footwear has reported a net loss in its first quarter of 2009, despite a rise in sales.

The footwear company said consolidated net sales reached US$25.9m, up 5% from $24.7m in the first quarter of 2008.

"While the company continued to grow its revenue, the challenging near-term retail environment and LaCrosse's significant investments in strengthening its foundation for long-term growth, including its new Midwest distribution center, resulted in its first quarterly net loss since fiscal 2004," the company said.

The net loss was $0.7m, compared to net income of $0.8m in the first quarter of 2008.

Sales to the work market were $19.0m for the first quarter of 2009, up 6% from $17.9m for the same period of 2008.

"The growth in work sales reflects continued penetration into various avenues within the US Government market, including growing demand from aftermarket military suppliers. The sales growth from the government channel was partially offset by the impact of the bankruptcies of two major retailers and widespread softness in the retail channel."

Sales to the outdoor market were $6.9m for the first quarter of 2009, up slightly from $6.8m for the same period of 2008, on the back of strength in its cold weather product offerings.

For the first quarter of 2009, gross margins were 37.9% of net sales, compared to 40.7% in the same period of 2008. The decline in gross margins was primarily due to the impact of the Company's investments in its Portland factory, increased costs as a result of re-sourcing due to the closure of one of its third party manufacturing facilities in 2008, an increase in markdown sales, and certain product cost and mix changes, the company said.

LaCrosse's operating expenses were $10.9m in the period, up $1.9m from the first quarter of 2008.

"While overall retail demand remained at historic lows in the first quarter of 2009, we continued to grow our revenue, capture market share and invest in the long-term strength of our business," said Joseph P. Schneider, president and CEO of LaCrosse Footwear.

"In coming periods, we remain focused on our long-term strategic initiatives and investing in our business, including the gradual expansion of our European sales effort, the completion of our new Midwest distribution centre and the continued development and introduction of innovative new products. While these investments significantly impacted our bottom line in the first quarter, we remain absolutely focused on building long-term shareholder value and maintaining operational excellence, backed by a strong balance sheet with no bank debt, powerful brands and a talented and dedicated team."