Shares of Pacific Sunwear of California Inc. were down 43% in midday trading Wednesday, to 34 cents and a $24 million market cap, as the Anaheim-based action sports retailer reported lower-than-expected revenue and a higher-than-expected loss for its August quarter.
The retailer’s revenue for the second quarter ended Aug. 1 was $ 195.6 million, down from the $211.7 million it reported for the same period last year. Analysts expected $204.6 million.
PacSun reported earnings of $8.3 million, or 12 cents per diluted per share, compared to a net income of $7.5 million, or 10 cents per diluted share, for the second quarter of fiscal 2014. The earnings include a noncash gain of $15.7 million, or 22 cents per diluted share, according to the company.
It posted a loss of $4.4 million, or 6 cents per diluted share, excluding the noncash gain, along with a $3.3 million tax benefit.
Analysts anticipated a net loss of 2 cents.
PacSun also posted a 6% decline in same-store sales, ended the quarter with 608, which is 10 fewer than a year earlier.
“Key seasonal categories including shorts, swim and sandals were down in both genders and were the primary causes of disappointing results in the second quarter,” company President and Chief Executive Gary Schoenfeld said in a statement.
He said cost-cutting efforts that includes corporate restructuring should cut $15 million in expenses in the company’s fiscal year 2016
Approximately one-half of the savings would come through more streamlined execution in our stores, and the other half through the restructuring of operations at our corporate headquarters and the reconfiguration of certain positions and departments.”
PacSun also announced it promoted of Chris Tedford to vice president and interim chief financial officer. Tedford replaces Michael Kaplan, who left the company after more than four years of service.
PacSun’s guidance for the third quarter anticipates a loss of 13 cents per diluted share to 5 cents per diluted share.
It anticipates same-store sales to decline between 6% and 3%, while its revenue is expected to come in at $196 million to $203 million.
PacSun reported results after markets closed Tuesday.
