May 6 (Reuters) - K-Swiss Inc (KSWS.O) posted a narrower-than-expected quarterly loss on improved margins, but the athletic-shoe maker forecast a 5 percent to 10 percent drop in 2010 revenue, hurt in part by the closure of a manufacturing facility in Thailand. K-Swiss, which sells athletic, training, and children's shoes, apparel and accessories, said that on a year-over-year basis, it expects second- and third-quarter revenue to dip, and then pick up again in the fourth quarter.

K-Swiss shoes

Second- and third-quarter revenue will be hurt by the April closure of one of K-Swiss's three contract manufacturers in Thailand. Assuming it cannot fulfill previously scheduled orders from the operation, the company sees about $5.0 million in lost revenue.

As a result of the closure, K-Swiss said it will be unable to fulfill orders for about 700,000 pairs of shoes scheduled to be produced in the second and third quarters.

A majority of these pairs were being produced to fulfill orders for Latin America and to a lesser extent Europe, the company said.

For the first quarter ending March 31, K-Swiss posted a net loss of $4.7 million, or 13 cents a share, compared with a net loss of $1.1 million, or 3 cents a share, a year earlier.

However, gross margins improved to 44 percent, from 38 percent in the year-ago quarter. Revenue at the company, which sells its products under the K-Swiss brands in the United States and Europe, slipped 11 percent to $65.9 million, hurt by weak domestic and international sales.

Analysts on average were looking for a loss of 14 cents a share, on revenue of $68.6 million, according to Thomson Reuters I/B/E/S. The shoe maker also expects 2010 gross margin to increase to about 43 percent, from 36 percent in 2009, due to fewer closeout sales in 2010.

K-Swiss sees selling, general and administrative expenses rising to between $143 million and $148 million, due to increased marketing expenditures.

Shares of the Westlake Village, California-based company closed at $12.04 Wednesday 5 May on Nasdaq. (Reporting by Shradhha Sharma in Bangalore, Editing by Anthony Kurian, Anne Pallivathuckal)