NEW YORK and POZNAN, Poland, Nov. 18, 2010 (GLOBE NEWSWIRE) -- Sunset Suits Holdings, Inc. (OTCBB:SNSX), a leading designer and retailer of high quality menswear, today provided a business update and reported financial results for the quarter ended September 30, 2010.
Mr. Miroslaw Kranik, Chief Executive Officer of Sunset Suits, commented, "We are pleased to report that the benefits of our strategic initiatives are beginning to take hold in a substantial way. This was evident in our third quarter results as gross margins increased to 61.2% from 54.6% in the third quarter of last year and from 55.1% in the second quarter of 2010. Our goal is to increase margins to a sustainable 70% level, and we are trending well to achieve that goal."
"The decrease in revenue in the third quarter of this year was partly attributable to having fewer retail outlets and partly due to lower inventory levels in our stores stemming from a liquidity crunch that we are working to rectify. The store reduction was the result of our strategic move to focus on smaller store locations in higher traffic areas, such as shopping malls. We closed 26 underperforming stores since January 1, 2010 and opened 7 stores in mall locations during the period. The total number of stores in Poland stands at 69 as of September 30, 2010, down from 88 stores at September 30, 2009."
"Sales began to pick up during the third quarter of 2010 and heading into the fourth quarter, we are seeing a continuation of these favorable sales trends at Sunset Suits. Our product mix, sales incentives, pricing strategy and generally improving economic conditions are helping to increase revenue, while our shift to an outsourced manufacturing model and other austerity measures are improving our bottom line.
We maintain our net income guidance of at least $2.0 million, or $0.16 per share for 2010, and $3.4 million, or $0.27 per share for 2011.
According to PMR Research, a well-recognized market research company specializing in Central and Eastern Europe, the total clothing and footwear market in Poland reached $9.5 billion in 2008 and decreased to $8.9 billion in 2009. PRM estimates the market will resume growth to $9.4 billion in 2010.
Revenue for the three months ended September 30, 2010 was $5.3 million, as compared to $6.9 million for the three months ended September 30, 2009, a decrease of 22.6%. The difference in revenue primarily reflects the closing of 26 unprofitable retail outlets since January 1, 2010. The company opened seven stores during that period. Gross profit was $3.3 million for the third quarter of 2010, as compared to $3.8 million for the third quarter of 2009. Gross margin for the third quarter of 2010 was 61.2% versus 54.6% in the comparable period in 2009. Operating loss was $1.0 million for the third quarter of 2010, as compared to an operating loss of $941,000 for the third quarter of 2009. The operating loss in the third quarter of 2010 includes a loss on disposal of fixed assets, net, of $421,000. Net loss from continuing operations was $370,000 for the third quarter of 2010 compared to a net loss of $975,000 in the comparable period last year. Net income from discontinued operations was $0 versus income from discontinued operations of $754,000 in the third quarter of 2009. Net loss for the third quarter of 2010 was $370,000, or $0.03 per share versus a net loss of $221,000, or $0.02 per share in the third quarter of 2009. Shares outstanding at September 30, 2010 totaled 12,499,645 versus 12,499,645 at September 30, 2009.
About Sunset Suits Holdings
Sunset Suits is a designer and retailer of high quality menswear based in Poland. The company's merchandise includes suits, sport coats, slacks, dress shirts and ties. Sunset Suits distributes its clothing primarily through its sales outlets. The company operates 69 domestic retail stores in Poland, 3 stores in Latvia, 8 stores in the Czech Republic, and 5 stores in Lithuania. Sunset Suits targets men in the 18 to 35 year-old age group, one of the most rapidly developing demographics in the industry.
The Sunset Suits Holdings, Inc. logo is available at
This press release may contain forward looking statements. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, forward-looking statements contain terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "would" and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect the Company's current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, readers should not place undue reliance on these forward-looking statements. These forward-looking statements include, among other things, statements relating to: general economic conditions; expectations regarding the Company's ability to maintain and grow its business; expectations regarding the continued growth of the Polish clothing industry; beliefs regarding the competitiveness of the Company's products; expectations with respect to increased revenue growth and the ability to achieve increased profitability; future business development, results of operations and financial condition; and competition from other apparel companies. Also, forward-looking statements represent the Company's estimates and assumptions only as of the date of this press release and actual future results may be materially different from what the Company expects. Readers are encouraged to review the "Risks Factors" section in the Company's Registration Statement on Form S-1/A filed on January 12, 2010. The Company assumes no obligation, and does not intend, to update any forward-looking statements, except as required by law.
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