By Adriano Marchese

Roots Corp.'s performance improved slightly in the second quarter of fiscal 2021, with adjusted loss beating analyst expectations, but sales remained virtually flat in the period as unfavorable foreign exchange weighed on wholesale sales with its overseas partners.

For the three months ended Aug. 1, the Canadian premium outdoor lifestyle brand said loss per share was three Canadian cents ($0.02), compared with a loss of C$0.04 in the prior year quarter.

Total sales were C$38.9 million, up marginally from C$38.2 million.

The company said sales for its partners overseas fell to C$8.5 million, a more than 12% decline from the C$9.7 million reported in the second quarter of fiscal 2020 which the company blames on the effects of unfavorable foreign exchange on its wholesale sales to its operating partner in Taiwan.

On the other hand, reflecting a changing customer shopping pattern, Roots said direct-to-consumer sales have risen to C$30.4 million, up from C$28.5 million, as more and more customers shift to in-store activity.

Roots added that e-commerce sales have continued to show significant growth over pre-pandemic levels, but noted that online demand has moderated on year-over-year basis as a result of those shifting shopping habits.

Roots reported a net loss was C$1.2 million, an improvement from a net loss of C$1.8 million. On an adjusted basis, net loss was C$0.01 a share, well ahead of analyst consensus expectations of a loss of C$0.09 a share.

"We are continuing to run the business in the manner needed to successfully adapt to the changing business environment created by Covid-19, including current industry-wide supply chain disruptions," President and Chief Executive Meghan Roach said.

Roots shares were recently up 3.7% at C$3.38.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

09-10-21 1026ET