Shoe Pavilion Inc. lost $1.2 million or $0.13 per diluted share in the first quarter ended March 31, compared to earnings of $206,000 or $0.03 per share in the same period a year ago. The Sherman Oaks-based footwear retailer said net sales increased 32.6 percent to $36.2 million, up from $27.3 million for the first quarter ended April 1, 2006. On a comparable store basis, Shoe Pavilion’s sales rose 7.8 percent from the comparable period last year. Shoe Pavilion blamed the loss, which was below expectations, on the stores opened in 2006, which, officials said, were in new shopping centers that experienced lower traffic levels due to construction taking place. “As a result of our first quarter performance, we are taking a more conservative approach to our outlook for 2007,” said Dmitry Beinus, chairman and CEO of the company. The company said that it expected comparable store sales to increase 2 percent to 3 percent in the second quarter and 3 percent to 4 percent for the 2007 fiscal year. Overall, Shoe Pavilion said it expects sales in the range of $37 million to $39 million for the second quarter of 2007 and an 18 percent to 22 percent increase in full year, 2007 sales to $155.5 million to $160.5 million.