Fashion design company Mossimo Inc has experienced an earnings downturn for the second and third quarters of 2003.

The Santa Monica-based company posted third quarter revenue of $4.2 million compared to $4.3m for the same period last year, while second quarter net earnings were $630,000, down on the $1.6m recorded in 2002.

After entering into a multi-product trademark license and design services agreement with Target Corp in March 2000, Mossimo now operates as a licensor and design studio, and no longer manufactures, sources or directly markets its products.

As such, the label's 2002-2003 revenue base has been a combination of license royalties and design service fees, rather than net apparel sales.

"Our third quarter results were in line with expectations, despite a challenging retail environment," chairman and CEO, Mossimo Giannulli, said in a news release.

"We remain focused on enhancing our design and merchandising initiatives and we are optimistic about our prospects for the future."