Mall retailers Pacific Sunwear of California Inc. and Wet Seal Inc., both working on turnaround efforts, offered divergent outlooks on Thursday for the three months through January.
Anaheim-based Pacific Sunwear, which is closing a chain of stores selling urban-style clothes to focus on its surfwear shops, lowered its profit outlook for the current quarter on weak December sales.
The company said it expects profits of $20.5 million to $22.6 million, excluding charges related to the closure of its demo chain, a handful of One Thousand Steps shoe stores and an Anaheim distribution center.
Wall Street on average had been expecting a profit of $24 million.
The company’s shares closed down 5% on Thursday with a market value of about $850 million.
Sales at the company’s stores open at least a year fell 2.8% during December, below Wall Street forecasts of a 3% rise in same-store sales.
The company said it sees the same sales trend carrying over into January.
December same-store sales at PacSun, the company’s dominant chain selling clothes inspired by surfing and skateboarding, rose 3.7%. Same-store sales at demo, selling hip-hop fashions, fell 18.3%.
The company runs 960 PacSun stores. It has 154 demo stores that it plans to close after failing to find a buyer for the chain in recent months. Six One Thousand Steps stores also are being closed.
Foothill Ranch-based Wet Seal, which runs two mall chains selling clothes for girls and young women, raised its outlook for the three months through January after a small rise in December same-store sales.
The company now expects a profit of $2.8 million to $5.6 million.
Wall Street had been expecting $3.7 million.
Shares of Wet Seal jumped 19% on Thursday on a market value of about $215 million.
The company saw same-store sales rise 0.6% in December, beating its own forecast and analysts’ expectations of a decline.
Wet Seal said it expects January same-store sales to decline in the low to mid-single digits.
The company runs 402 Wet Seal stores for teen girls and 96 Arden B stores for young women.
