Multi-brand footwear group Phoenix Footwear has reduced its fourth quarter and full-year net loss, thanks to improved margins and brand growth.

In the fourth quarter, net loss was US$11.9m, compared to a net loss of $23.4m for the fourth quarter of fiscal 2006.

This was despite net sales from continuing operations decreasing 3.2% to $19.4m during the final quarter.

The company said that gross margin from continuing operations expanded 760 basis points to 26.1%, compared to 18.5% in Q4 2006 due to "fewer closeouts and improved sourcing operations".

For the fiscal year ended 29 December 2007, the company's net sales from continuing operations decreased 5.3% to $82.9m.

Gross margin from continuing operations was 31.0%, compared to 32.2% for fiscal 2006 - a decrease attributed to the migration of sourcing activities to China and exiting its American Red Cross license.

Full-year net loss was $1.3m, compared to net loss of $20.4m for fiscal 2006.

"Fiscal 2007 was an important transitional time for our company, and we are very pleased with the success we achieved in executing each aspect of our revitalisation plan," commented Cathy Taylor, Phoenix Footwear's CEO.

"During the year, we significantly strengthened our management team, invested additional resources in our product design, and improved our sourcing and procurement capabilities, which are resulting in noticeable improvements in gross margins and accelerated growth across multiple brands."

For the first quarter of 2008, Phoenix expects net sales from continuing operations to increase 3% to $21.9m year-over-year, and gross margins to improve to 36.1% - leading to positive EBITDA for the quarter.

For fiscal year 2008, the company reiterated its previously issued guidance of net sales of between $95m to $100m and income from continuing operations of between $2.0m to $2.5m.