Orange County Business Journal

PacSun Shares Slump on Q4 Guidance

Kari Hamanaka Thursday, November 29, 2012

Shares of Anaheim-based Pacific Sunwear of California Inc. slumped in midday trading Friday, a day after the action sports retailer provided disappointing guidance for the January quarter.

Pacific Sunwear, which operates 722 stores in the U.S. and Puerto Rico, was trading down about 14% in midday trading Friday. The company had a recent market value of $110 million.

Pacific Sunwear said it expects a loss from continuing operations between $6.4 million to $12.1 million for the January quarter. That compares with a year-earlier loss of $14.3 million.

Analysts on average expected a loss of $6.4 million.

Pacific Sunwear said it expects revenue between $225 million and $235 million for the January quarter. That compares with analyst expectations of $221.7 million in revenue.

The company also said it expects same-store sales for the January quarter to range from a 1% drop to a 3% increase.

Pacific Sunwear also said it expects to end the January quarter with 645 stores, down from its current total of 722 stores. The closures are part of a plan announced late last year to shutter underperforming stores.

The January quarter guidance follows the company’s results for the quarter ended Oct. 27.

Pacific Sunwear reported net income of $948,000 for the October quarter, compared with a year earlier net loss of $17.6 million.

Analysts on average expected a $2.1 million loss.

Pacific Sunwear saw net sales for the October quarter up less than 1% from a year earlier to $228.4 million.

Analysts expected revenue of $226.2 million.

Same-store sales during the October quarter grew 1%. It was the first time same-store sales increased during a third quarter since 2007.

Chief Executive Gary Schoenfeld said in a statement that the same-store sales results were “evidence of our turnaround strategies taking hold.”