Shares of Anaheim-based Pacific Sunwear of California Inc. slumped after the mall retailer reported a bigger than expected quarterly loss and warned of more red ink for the current quarter.
Shares of Pacific Sunwear, which runs 880 stores selling clothes inspired by surfing and skateboarding, were down nearly 7% in afterhours trading to a market value of $267 million.
For the three months through July, Pacific Sunwear posted an adjusted loss of $14 million, flat from a year earlier and beating the $14.7 million expected on average by analysts.
Sales came in at $218 million, down 10% from a year earlier but topping the $213 million expected by Wall Street.
Pacific Sunwear continues to struggle with a sluggish retail market and competition from other styles that have stolen customers from action sports clothing in recent years.
Same-store sales, or sales at stores open for at least a year, fell 10% in the quarter from a year earlier.
For the three months through October, Pacific Sunwear warned of a potentially larger loss than analysts had been expecting.
The company projected a loss of $5.7 million to $10.2 million, versus the $7.7 million analysts had been figuring on.
Pacific Sunwear didn’t give a sales outlook. Analysts expect the company to see sales of $245 million in the current quarter, down 9% from a year earlier.
The company said it took out two mortgages worth $29 million on Pacific Sunwear’s Anaheim headquarters building and a warehouse near Kansas City.
Separately, Pacific Sunwear said it struck a deal with designer Mossimo Giannulli to sell clothes under his Costa Mesa-based Modern Amusement brand.
Giannulli is best known for clothes sold under his name at Target stores. He also was an investor in Costa Mesa’s Paul Frank Industries Inc., which was bought this month by Saban Brands LLC of Los Angeles.
The deal marks a second lease on life for Modern Amusement, which appeared to cease operations earlier this year after a legal fight with a prior licensee.
