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Sunglass Hut International: third-quarter results

26 November 1998: Sunglass Hut International, Inc. of the US announced its results for the third quarter of fiscal 1998 ended 31 October 1998.
Sales for the third quarter increased 0.4% to US$ 122.8 …

26 November 1998: Sunglass Hut International, Inc. of the US announced its results for the third quarter of fiscal 1998 ended 31 October 1998. Sales for the third quarter increased 0.4% to US$ 122.8 million from US$ 122.4 million for the comparable period in fiscal 1997. Comparable store sales for the third quarter decreased 0.5%. Results for the quarter were a net loss of US$ 4 million or US$ 0.08 per share, compared to a net loss of US$ 5.1 million or US$ 0.09 per share during the third quarter of 1997. “Third quarter results, while slightly improved from last year, fell below expectation due to disappointing sales performance throughout much of the quarter. On a positive note, our gross profit improved significantly as a result of management“s initiatives to return the company to historical levels of profitability. However, operating expenses rose during the period, partially due to negative expense leverage related to soft sales performance. We are hopeful that our holiday season initiatives including in store marketing, increased holiday catalog mailings and new merchandising programs will improve fourth quarter sales results,” said John X. Watson, President and Chief Executive Officer. During the third quarter, the company opened a total of 18 sunglass specialty locations and 13 new Watch Station locations, for a total of 31 new units. In accordance with previously announced plans to eliminate marginal or unprofitable sites through closure in 1998, the company closed 68 underperforming locations during the quarter and on a year to date basis has closed 149 locations. Additionally, the company indicated that it anticipates closing a total of approximately 200-225 underperforming locations by fiscal year end. “As we look ahead to fiscal 1999, we are committed to maintaining strict inventory and expense discipline, particularly as we continue to invest in merchandising and marketing initiatives to drive sales,” said Watson.

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