Heelys posts 2Q loss as sales plunge 75 percent

In the three-month period ending June 30, the company lost $394,000, or a penny a share, down from profit of $12.8 million, or 45 cents a share, in the same period last year.

Sales plunged to $18.2 million, down from $74.3 million in the same period last year.

Don Carroll, chief executive officer, said the company is introducing a new advertising campaign aimed at spurring demand for its products. He also said the company is continuing to reduce its inventory.

The company's earnings were announced after the stock market closed Thursday.

Heelys shares rose 28 cents, or 5.8 percent, to close at $5.09 in the regular session but fell 29 cents or 5.7 percent in after-market trading.

Heelys' business has been hurt for the past few quarters, pushing revenue and income down, as it sees a drop in demand.

Some analysts have said the domestic market for its wheeled sneakers has peaked. The weak economy has also hurt sales, and Heelys has reported canceled orders and reduced shipments in previous quarters.

Doctors' groups have also cited safety concerns with the shoes, and have recommended kids wear protective gear like knee pads and helmets.

Heelys has said a study it commissioned showed that its shoes have a safer injury rate than skateboarding, inline skating and even swimming.

The shoes are sold with safety information including a recommendation to wear protective gear.