Wall Street shrugged off a big third-quarter profit drop at Anaheim-based Pacific Sunwear of California Inc., focusing instead on the retailer’s outlook for the current quarter and its moves to cut inventory and slow store openings.
Shares of Pacific Sunwear were up more than 7% in afterhours trading. The company counts a market value of about $1.2 billion.
After missing analysts’ expectations for third-quarter profits and sales, Pacific Sunwear said it expects profits of $31 million to $35 million for the current quarter, higher than what some on Wall Street were expecting.
Pacific Sunwear, which operates surfwear and hip hop clothing stores, plans to open fewer stores next year. It now expects to open 40 stores and move or expand 35 existing ones.
The company also said it’s cutting the amount of clothes sold at its stores and is boosting displays.
For the third quarter, Pacific Sunwear said net income was $9 million, down 76% from a year earlier. The results include a charge for unsold shoes and accessories.
Sales were $375.4 million, vs. $377.5 million a year earlier.
Pacific Sunwear has been wrestling with falling sales for months now. Seth Johnson stepped down as chief executive in October.
