K-Swiss Inc. widened its second-quarter loss despite an increase in revenue.
For the period ended June 30, the Westlake Village, Calif.-based company lost $20 million, or 56 cents a share, compared with a net loss of $14.5 million, or 41 cents, in the prior-year period. Analysts were looking for a loss of 30 cents a share, as polled by Yahoo Finance.
In response to that larger-than-expected loss, the firm’s shares plunged 24 percent in Thursday morning trading.
Earnings declined despite a 40 percent rise in total revenue, to $65.5 million year over year. Both domestic and international revenues saw increases. Domestic sales advanced 44 percent to $32.6 million, while international grew 37 percent to reach $33 million.
Worldwide futures orders were also a bright spot. They climbed 39 percent to $89.9 million at the end of the quarter.
But the quarter was hit by a 21 percent increase in selling, general and administrative expenses, as well as a $3.7 million impairment on intangibles and goodwill.
“We are encouraged by what we see with increases in revenues and backlog, and growth of our performance category. The crucial selling season for the K-Swiss and Palladium brands is starting shortly. That will reveal how our marketing efforts and products perform,” Steven Nichols, chairman, president and CEO of the firm, said in a statement.
For fiscal 2011, the company expects full-year revenue to be between 25 and 30 percent above 2010’s levels. Consolidated gross margin is expected slip about 170 basis points to 37.5 percent.