• Q3 net loss of US$1.5m, versus $69,000 loss
  • Net sales down 19.5% to $6.6m
  • International sales suffer, but US revenues soar

Footwear company Heelys slid to a third quarter loss of $1.5m as sales slumped by nearly a fifth in the three months to 30 September.

International revenues were down 38% to $4.3m, thanks to a combination of reduced sales in Japan – where the company now handles its own distribution – and decreases in France and Germany.

However, Heelys reported higher sales in Italy and Russia, and said domestic net sales had soared 76% to $2.3m.

Meanwhile, gross profit margin declined to 36.8% from 39.7%, thanks to discounted sales of footwear purchased from Heelys’ former Japanese distributor, plus the cost of footwear destroyed in Europe because it was “unsellable”.

Company CEO Tom Hansen said momentum remained strong in the US, but admitted: “Difficult economic conditions and uncertainty continue to impact consumer spending throughout Europe, though our sales remain strong in our newer markets such as Italy.

“We still see opportunities in Asia and we’re acclerating our efforts to increase distribution and drive our business in the region.”