Shares of Anaheim-based Pacific Sunwear of California Inc. plunged 15% in after-hours trading after the action sports retailer forecast a wider-than-expected loss for the three months through April.
Pacific Sunwear, which operates a chain of 733 stores that sell clothes, shoes and accessories inspired by surfing, skateboarding and snowboarding, had a recent market value of $170 million.
The company said Thursday that it expects a loss of between $17.7 million and $23.1 million for the April quarter. The retailer didn’t provide guidance on sales for the period.
Wall Street analysts on average had expected a loss of $16.3 million for the current quarter on revenue of $171.8 million.
Pacific Sunwear said sales at stores open at least a year are expected to range from a 4% decline to a gain of 1%.
The guidance came the same day the retailer reported a $38.1 million loss for the three months through January, widened from the $35.2 million loss it had in the year-earlier period.
Analysts on average expected a loss of about $15 million for the January quarter.
The company’s loss was $13.1 million loss excluding charges from 87 store closures announced in December as well as a non-cash loss on a derivative liability.
Pacific Sunwear also missed on sales for the January quarter, which totaled $234.2 million, down about 1% from a year earlier.
Analysts expected sales of $245.4 million.
Sales of stores open at least a year were flat during the January quarter.
“Our sales trends improved as we moved further into the holiday season resulting in flat comparable store sales for the quarter and an improvement in merchandise margins, compared to the fourth quarter last year,” Pacific Sunwear Chief Executive Gary Schoenfeld said in a statement.
Schoenfeld said the company will “remain focused on the key merchandising, in-store and digital initiatives that we believe are critical to successfully rebuilding the PacSun brand and our position in the marketplace.”
Pacific Sunwear announced in December a plan to close as many as 200 stores this year, which would leave the chain with about 600 locations.
The news was seen as a major step forward for Pacific Sunwear, which has been trying to make a turnaround for the past three years. It’s implemented a number of strategies, including bids to play up big-name surf and skate brands along with new store displays and more fashionable offerings.
The plan to trim the chain’s store count also came amid new financing deals that included a five-year, $60 million loan with San Francisco-based Golden Gate Capital in exchange for two seats on the PacSun board. The deal included an option for Golden Gate to buy up to a 20% stake in the company.