MOSSIMO SEES LOSS IN PERIOD
IRVINE, Calif. — Mossimo Inc. said it expects to report a first-quarter loss of about $500,000, primarily due to soft sales and a pretax charge of $800,000 to discontinue its watch business and cut 7 percent of its workforce, or about 25 positions.
Wall Street had projected earnings of about 12 cents a shares. Shares of Mossimo fell 2 5/8 to 8 3/8 Friday on the New York Stock Exchange.
In the 1996 quarter, the company earned $4 million, or 28 cents a share.
Mossimo’s sales in the quarter ended March 31 are expected to inch ahead 1.6 percent to $24.5 million from $24.1 million a year earlier.
“Lower sales of men’s activewear that typically carry higher margins, and increased expenses, including onetime charges, contributed to a disappointing quarter,” Tony Cherbak, chief financial officer, said in a statement.
“To control costs going forward, we have consolidated and eliminated a number of functions through our workforce reduction and have initiated other cost-cutting measures that are expected to result in yearly savings of about $3 million,” Cherbak added.
Mossimo Giannulli, chairman and chief executive, noted that moving the company’s business to finer sportswear “is a complex process that is taking more time to complete than originally expected.”
He said that although there are “bright spots” in the licensed women’s swimwear and various segments of the women’s sportswear business, the company expects the softness in the men’s activewear to continue in the near future.
“As we move ahead, we will pursue appropriate growth opportunities we believe lie within the status sportswear sector while developing products intended to address the needs of our activewear-based specialty retail customers,” he added.
The company expects to report final results May 8.