Shares of Anaheim-based retailer Pacific Sunwear of California Inc. were up about 8% in late morning New York trading after an analyst raised his profit forecast and said the company is improving its merchandise and getting more efficient.
Wachovia Capital Markets analyst John Morris said he’s pleased with Pacific Sunwear’s focus on its core PacSun chain of stores selling clothes inspired by surfing.
The company is in the process of closing its smaller demo chain of stores selling urban styles and earlier closed its One Thousand Steps shoe store chain.
The company should start seeing gains from its restructuring in the quarter through July, Morris said.
He changed his rating on the stock to “outperform” from “market perform” in a note to investors.
Pacific Sunwear’s shares are down about 40% in the past year with a recent market value of $940 million.
The analyst upped his profit forecast for the 12 months through next January.
Morris said he now forecasts a yearly profit of $55 million, up from an earlier view of $51.6 million.
Analysts on average expect Pacific Sunwear to earn $53 million.
