Supply constraints in China continued to impact LaCrosse Footwear Inc.’s business in the third quarter.
The Portland, Ore.-based company reported a net income of $1.1 million for the quarter ended Sept. 25, down from $2.2 million in the same period a year ago. Earnings per share were 17 cents, down from 35 cents.
Net sales were $37.7 million, down 8 percent from $40.8 million in the year-ago period. The results fell short of analysts’ expectations, which averaged 38 cents on revenue of $41.1 million, as polled by Yahoo Finance.
LaCrosse saw stronger demand in the quarter for both its core work and outdoor products, Joseph Schneider, president and CEO of LaCrosse, said in a company statement. But revenue for both categories also suffered from the capacity limitations of the firm’s third-party manufacturing partners in China.
As a result, LaCrosse had a significant volume of work and outdoor boot orders that it was unable to fulfill in the third quarter, but it expects to ship them early in the fourth quarter.
“Moving into the fourth quarter, we have taken steps to mitigate these supply issues,” said David Carlson, LaCrosse’s EVP and CFO, said in a conference call. “We believe our diverse sourcing strategy in Asia and our expanded domestic production capabilities continue to be a source of strength. We are currently expanding our factory base, which will improve capacity and product availability to meet forecasted demand for the long-term.”
LaCrosse’s bottom line was also impacted by quarterly fluctuations in its military business, a volatility that the firm expects will continue in future periods.
“The long-term trends across our multiple distribution channels look increasingly positive, with strong at-once demand from our wholesale channel partners and an improved consumer spending environment,” said Schneider.
At the end of the third quarter of 2010, LaCrosse had cash and cash equivalents of $3.6 million and no significant long-term debt.