Black Diamond reported lower margins and higher operating losses for the second quarter as compared to a year ago, due to a number of factors, but the management remained bullish about the balance of the year, due to many new product introductions, supported by higher marketing spend.

Sales went up by 5 percent to $30.7 million in the quarter, with a 6 percent increase on a currency-neutral basis, in spite of lower sales of apparel. Supported in particular by higher sales in the climbing and ski categories, they grew by 2 percent in the U.S. to nearly $17 million and by 7 percent elsewhere, reaching $13.7 million.

Thanks in particular to better deliveries, BD registered a 23 percent increase in sales to foreign distributors, led by those in China, Japan and Australia. Direct-to-consumer sales went up by 15 percent, aided by the launch of e-commerce in Europe and the elimination of discounts on its main website at the end of the period.

On the other hand, the gross margin fell by 0.9 percentage points to 29.5 percent. An increase of 0.9 percentage points from the product mix and the channel mix was offset by declines of 1.5 percentage points from the sale of discontinued merchandise and 2.2 percentage points from the repatriation of the production from China to Salt Lake City.

Assuring analysts that there will be no more problems with the change in sourcing, the management told them that they could expect the gross margin to increase by between 3 and 4 percentage points for the full financial year, reaching a level of between 32.5 and 33.5 percent as compared to 29.5 percent in 2016.

Sales should go up by between 4 and 7 percent in local currencies and by 3 to 7 percent in dollars for the year, up to a range of $153 to $158 million compared with $148.2 million last year.

Sales will be supported in the second half of this year by the first shipments of BD's new line of climbing shoes, which has won several awards, and strong demand for its products in areas such as indoor climbing apparel. The management also expects higher reorders for all kinds of products as a result of earlier deliveries and stronger marketing and merchandising.

The marketing initiatives deployed by BD resulted in 3.2 million consumer impressions during the first half of 2017 and should end up with more than five million impressions for the full year.

At the same time, BD has invested in the development of a wider product spectrum, which is now covering more than 20 categories. BD says it has developed ten new product innovations for spring 2018, doing it more rapidly than the competition.

Higher spending on product development and marketing will continue to weigh on the company's results. It contributed to depress its adjusted Ebitda in the second quarter, which was negative at $2.69 million versus a loss of $2.31 million in the year-ago period.

Including restructuring costs and non-cash items, BD had a net loss of $3.65 million for the quarter, up from a loss of $3.17 million for the year-ago period.