warned it will miss fourth-quarter earnings estimates and said its chief executive has been terminated.
The company expects to lose $5.1 million to $6.1 million in the quarter on sales of $19.8 million. It didn't provide an estimate of its per-share loss but in the third quarter net income of $1.5 million translated into earnings of 4 cents a share.
Two analysts surveyed by Thomson First Call were expecting a loss of 4 cents a share in the fourth quarter.
The company cited an unfavorable sales mix in the earnings miss.
"The company's branded apparel sales missed previous projections by $3.1 million, as some planned clearance activity for the fourth quarter was pushed into the first quarter of fiscal 2006, while private label sales exceeded previous projections by $3.7 million," Innovo said.
Samuel J. Furrow was terminated as CEO and will be replaced on an interim basis by Marc Crossman, the president and CFO. Furrow will remain a director. The company also said it plans to hire an investment bank to assist in an exploration of strategic options.
"The company is currently evaluating several investment banks, and anticipates hiring an adviser as soon as practicable. The company also announced that it is currently in discussions to sell or exit its indie branded apparel business. In connection with these measures, the company intends to align the organization's people and its resources behind its premier asset, Joe's Jeans."