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Monday, Aug 15, 2022

Analyst: Pacific Sunwear CEO’s Strategy Taking Hold

Shares of Pacific Sunwear of California Inc. jumped early Tuesday after an analyst said the company’s turnaround strategy is showing signs of taking hold and the mall retailer could beat conservative expectations for the current quarter.

Pacific Sunwear runs about 915 stores that sell clothes inspired by surfing, skateboarding and other California fashions.

The company’s stock closed up more than 6% on a market value of $430 million.

FBR Capital Markets analyst Adrienne Tennant raised her rating on the shares from “market perform” to “outperform,” suggesting her clients buy the stock.

New Chief Executive Gary Schoenfeld’s plan to focus on big household brands,such as those from Huntington Beach’s Quiksilver Inc., Costa Mesa-based Volcom Inc. and Irvine-based Billabong USA,is playing out, Tennant said.

Markdowns on clothes at the company’s PacSun stores aren’t as pervasive as last year, she said.

Another Schoenfeld effort,getting workers at PacSun stores to pay better attention to shoppers,is improving, according to Tennant.

The company could exceed what Tennant called “conservative” expectations for the three months through October.

Wall Street on average expects sales of $259 million, down 20% from a year earlier. Analysts forecast a loss of $13.9 million, versus a profit of $660,000 a year earlier.


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