Vans Hails Smaller Loss as Sign of Turnaround

Vans Inc., the canvas shoe maker, Monday reported a third-quarter loss on an overall decline in sales.

The Orange-based company’s loss of $504,000 is an improvement from a net loss of $2.4 million, or 25 cents per share, in the third quarter of 1993. And while overall revenue fell, domestic sales of Vans shoes increased, mostly because of several new product offerings, the company said.

“Things are on target. The plan was that this quarter would be the beginning of the turnaround, and you’re seeing some evidence of that,” said Seth Feinstein, analyst with Crowell Weedon & Co., a Los Angeles investment banking firm.

The shoe company reported third-quarter sales of $17.9 million, compared to $18.2 million in the 1993 third quarter. International sales, which include shoes sold in Mexico, dropped to $3.6 million, compared to $5.3 million for the same period a year ago, mostly because of a soft economy in Mexico, the company said. Domestic sales of Vans’ products were up 19% for the quarter to $8.8 million from $7.4 million a year ago.

Increased domestic sales and a drop in inventories are both positive signs for the company, Feinstein said.

Vans said it is boosting weekly shoe production from about 75,000 pairs to 100,000 pairs.

“The results for the quarter are encouraging and in line with our expectations,” said Walter E. Schoenfeld, president and chief executive officer at Vans. “Even with the improvement in financial performance, there is still much to do. One of the main negatives for the past year has been low production levels. We are presently increasing production. . . . This should have a positive effect on gross margin.”

In its announcement, Vans revealed that factory workers at the company’s Orange manufacturing plant are scheduled to vote April 8 on whether to unionize.

Sales for the nine months ended Feb. 27 were $57.6 million, compared to $63.9 million for the same period last year. Profit for the nine months dropped to $480,000, or 5 cents per share, because of sluggish sales. This compares with net income of $1.5 million, or 15 cents per share, for the same period in fiscal 1993.

The earnings report was released after the market closed, so did not impact stock prices. Vans’ stock was up 12.5 cents in Nasdaq trading Monday, closing at $5.625 per share.