Vans Inc, the designer and marketer of branded footwear, clothing and accessories for the youth market, says it expects its results for the remainder of this fiscal year to lag behind last year's figures.

Announcing its financial results for the second quarter of fiscal 2002 ended 1 December 2001, the company said net sales were $68.3 million versus $74.5 million last year with net income of $0.5 million versus $3.2 million and diluted earnings per share of $0.03 versus $0.21, in line with consensus estimates.

For the first six months of fiscal 2002, sales were $186.4 million versus $175.1 million last year, net income was $11.9 million, versus $10.7 million, and diluted earnings per share was $0.64 compared to $0.72.

"The business climate remains challenging in the near-term," said Gary H Schoenfeld, president and chief executive officer.

For the second quarter, total US sales, including sales through Vans' US retail stores, were $49.2 million, versus $53.4 million for the same period a year ago. Sales through the company's US retail stores decreased 6.3 per cent to $23.1 million in the second quarter of fiscal 2002, from $24.7 million for the same period a year ago. Comparable store sales for the second quarter declined 8.9 per cent versus the same period last year.

US wholesale sales in the second quarter were $26.1 million, versus $28.7 million a year ago. Total international sales were $19.1 million, down 9.5 per cent from $21.1 million a year ago.

Mr Schoenfeld continued: "The slowdown in consumer spending has adversely affected our retail and wholesale businesses. Having achieved twenty-seven consecutive quarters of comp store gains, we had a decline of almost 9 per cent in the second quarter."

The biggest bright spot was a more than 50 per cent growth in business with core skate and surf shops.

However, the combination of lower than expected sales and margin pressures has prompted Vans to adopt a more defensive strategy to combat these issues. Mr Schoenfeld said the company was "implementing a number of cost cutting and efficiency programs in addition to our continued focus on tight inventory management."