Vancouver's Sterling Shoes Income Fund (TSX:SSI.UN), which operates the Sterling, Joneve, Shoe Warehouse and Freedman's retail brands, reported a 4.1% rise in second quarter sales, but a 4.6% decline in same-store sales for the three month period ending June 30, 2009.
Total second quarter sales rose to $30.6 million from $29.4 million in the second quarter, but increased cost of sales and other expenses pushed the income fund to a net loss of $651,000 compared with a profit of $866,000 in the same period a year ago.
"This quarter's results reflect the difficult retail sales environment that we are operating in," said Jeremy Horwitz, Sterling's president and CEO.
The cost of sales as a percentage of sales rose to 54.5% from 49% in 2008's second quarter because of a weakening Canadian dollar and the unfavorable economic conditions in the period that required more promotional activity.
A 16% decline in the value of the loonie versus the U.S. dollar in the second quarter also increased purchase prices for inventory since all of the company's goods are manufactured outside of Canada. About 43% of its products were denominated in U.S. dollars in the period.
The company said its continuing to find ways to reduce costs and control inventory. In the period, the company improved its inventory position by 8% on a units per store basis.
Sterling Shoe's unit price range during the past week: between $2.29 and $2.33; 52-week high: $8.39; 52-week low: $0.86.