Fila Holdings SpA said yesterday that a sharp drop in U.S. and South Korean sales resulted in a first-quarter loss of $8.7 million -- a steep drop from a $32.6 million profit in the year-ago quarter.
The news sent American depositary receipts of the Italian sportswear company, which has its U.S. headquarters in Sparks, down $3.125, about 13 percent, to close at $20.50.
Fila said strong sales growth elsewhere, especially in Europe, could not offset the U.S. and South Korean declines.
On a per-share basis, Fila reported a loss of 33 cents, compared with a net profit in the year-ago quarter of $1.22 per ADR. Sales fell 30.5 percent, from $429.1 million to $305.1 million.
Enrico Frachey, Fila's chief executive officer, said: "U.S. and Korean sales both decreased sharply for completely independent reasons; the first because of the drop in demand for basketball and cross-training shoes for street wear use, and the second because of the strong local currency crisis."
He also said the company has failed to cut expenses in the United States and Korea, to put costs in line with reduced sales.
U.S. footwear sales fell 52 percent, from $163.6 million to $78.8 million. Apparel sales fell 57 percent, from $57.2 million to $24.3 million.
"With the U.S. sales drop, Europe becomes our leading market, now accounting for 46 percent of our total revenues compared to 34 percent for the U.S.," Frachey said.
"We expect further growth in the European markets, in particular for the apparel business."
Pub Date: 5/07/98