SUNGLASS HUT LOSS GROWS A BIT IN QUARTER
CORAL GABLES, Fla. — Hit by weakened sales trends and inventory shrinkage, Sunglass Hut International reported a third-quarter loss of $2.9 million compared to year-ago earnings of $2.5 million, or 5 cents a share.
Sales for the three months ended Nov. 2 rose 22.1 percent to $112.9 million from $91.4 million with same-store sales up 1.2 percent.
In a statement, the company said results were depressed by 3 cents a share due to charges for higher-than-anticipated inventory shrinkage in former Sunsations locations and write-offs of defective products. The Sunsations chain was acquired last year. Shrinkage in Sunglass Hut locations, however, was in line with expectations.
Earnings for the nine months, which include $10.1 million in nonrecurring expenses related to acquisitions, climbed 25.2 percent to $15.9 million, or 29 cents a share, from $12.7 million, or 29 cents a share. Sales gained 31.2 million to $402.2 million from $306.5 million and same-store sales rose 4.6 percent.
Year-ago figures were adjusted for corporate taxes that would have been provided had Sunsations been public.
Jack B. Chadsey, president and chief executive officer, said that the company expects fourth-quarter earnings per share to be below 1995’s levels.
In addition, the company plans to close marginal or unprofitable sites. An evaluation of the existing 2,000 stores is under way and is expected to be completed in the next 90 days. The costs of the closings will be charged in the fourth quarter, but Chadsey said he did not yet know the extent of the charge.
Chadsey said the company expects to close between 50 and 100 stores, noting that shutting 25 to 30 stores a year is normal practice.