K-Swiss has brought in several new staff people in product design and management to combat the “weak” acceptance of the brand in the domestic U.S. market, where its sales fell by 40.1 percent in the 1st quarter to $61.4 million. A 27.8 percent increase in U.S. sales under the Royal Elastics brand was insufficient to prevent a 39.7 percent drop for the company in its main market.

The company’s total revenues fell by 18.3 percent to $122.6 million in the quarter and net earnings dropped by 27.8 percent to $18.0 million. But sales outside of the USA climbed by 29.2 percent to $60.2 million, including sales of $57.1 million for K-Swiss and $3.0 million for Royal Elastics. Sales in Europe increased by 28 percent, but the management says the outlook for the market is not as strong as expected.

During the 1st quarter, three of K-Swiss’ four footwear categories fell by double-digits. Tennis shoes were the lone grower, rising by 4.5 percent. The company’s domestic backlog is down, but its backlog outside of the USA is up.

The company will give its new team time to make an impression on the U.S. market, so in the near term it expects domestic sales to remain feeble. Reducing its previous guidance, K-Swiss expects full-year revenues to be in the $415-440 million range.