NEW YORK--Movie Star Inc. reported a third-quarter loss of $1.3 million, against $3.4 million a year ago, when results were hit by a hefty special charge. The company added that it expects a substantial loss in the current fourth quarter.
The loss in the year-ago quarter included a $3.8 million charge for the write-down of inventory.
In the quarter ended March 31, sales for the company, which manufactures innerwear and men's shirts and operates 25 retail outlets, fell 16.5 percent to $17.3 million from $20.8 million. The company noted that it posted reduced sales at its popular-price intimate apparel division, Sanmark, which last year discontinued maintaining in-stock inventories to accommodate smaller accounts.
Movie Star said it continues to mitigate Sanmark's lower sales volume through efforts to increase margins and boost sales of higher margin goods. The company is also working on improving sourcing capabilities.
For the fourth quarter, the company anticipates an operating loss exceeding $1.5 million. "However, because of the weak retail environment and the deferral of the receipt of goods previously ordered by certain customers, we cannot presently quantify the full extent of the loss," Mark M. David, chairman and chief executive officer, said in a statement.
In last year's fourth quarter, the firm posted an operating loss of $3.2 million and a net loss of $1.9 million.
The company added that as a result of the depressed retail climate, its spring selling season was "below expectations and disappointing."
David added, "To restore profitability and as part of our overall plan going forward, we intend to make significant reductions in overhead in fiscal 1996."
As a result, he said, senior management has "significantly reduced its compensation."
Saul Pomerantz, chief financial officer, said in a telephone interview that the company was not yet prepared to give any details on the salary cuts.
In the nine months, Movie Star earned $234,000, or 2 cents a share, against a loss of $1.4 million after special items a year ago.
Partially offsetting the inventory charge, the loss in the year-ago period came after a $984,000 gain on the sale of plant facilities and on an $861,000 accounting gain.
Sales were up slightly to $85.8 million.--Fairchild News Service

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