LaCrosse Footwear posted a net loss of $0.7 million in the first quarter ended March 26, compared with a net profit of $1.7 million a year earlier, as revenues declined by 26.3 percent to $25.2 million, hit by a drop in military sales.
The U.S. footwear company has been trying to diversify its operations in order to be less dependent on military sales. It has set up offices in Hong Kong and in Vietnam to expand sales in Asia. The management said it was also planning to expand in Canada, Northern Europe and Japan.
Excluding the government channel, wholesale, direct and international turnover rose by 14 percent on strong demand for hiking and other outdoor footwear. By product, sales to the work market, which includes the military, were down by 39.1 percent to $16.1 million and the outdoor market rose by 16.1 percent to $9.1 million, lifted by hiking and hunting goods.
The gross margin widened to 41.4 percent in the first quarter from 40.2 percent a year earlier aided by the success of its new products and growth in the wholesale and direct businesses. Inventories rose by $21.9 million year-on-year to $46.9 million at the end of March to boost the availability of core products to address reorders, growth of the wholesale business and respond to orders from the military. Military orders fluctuate on a quarterly basis. On April 21, LaCrosse announced that it had received a $2.4 million order from the U.S. Marine Corps for the Danner Rugged All Terrain Hot boot. The goods have to be delivered within two weeks for troops in Afghanistan.