PacSun Announces Increased Income, Plans New Stores
The future keeps getting brighter for Pacific Sunwear of California Inc.
The Anaheim, Calif.–based mall retailer of surf and skate apparel announced high sales for its second quarter, which ended July 31, and discussed expansion plans during a conference call on Aug. 9.
PacSun Chairman and Chief Executive Officer Greg Weaver said the company’s secondquarter earnings were $19.3 million, up 44 percent over the past year, and same-store sales increased 6.8 percent during the same period.
Weaver also announced plans to open 120 stores in 2005. Approximately 70 of these stores will be Pacific Sunwear stores, 40 will be hip-hop influenced d.e.m.o. boutiques, and the remainder will be PacSun Outlet stores.
PacSun’s accessories and footwear division was a top performer. Weaver said he expects the division to gain a market share of 35 percent in the near future.
One of the only disappointments for the retailer was the girls’ apparel division, which Weaver said posted slightly negative sales results. He said the store hopes an injection of bright, feminine styles will improve sales by the end of the year.
Weaver also addressed revamping the d.e.m.o. division. The company will place the store’s activewear styles on the back burner in favor of an upscale, more formal look. Pac- Sun President and Chief Merchandising Officer Tim Harmon spoke specifically about the d.e.m.o. changes on July 13 at the CIBC World Markets Fourth Annual Consumer Growth Conference in Boston.
“Our guys want button-up shirts with cleaned-up denim, and our junior customer is looking for more sexy day-to-night tops to go with their cleaned-up jeans,” Harmon said.
Analysts remain bullish on PacSun. Andy Graves, a senior equity analyst at San Francisco– based Pacific Growth Equities LLC, upgraded his ratings for the company from “Equal Weight” to “Over Weight” on July 20 because he thinks the retailer’s recent merchandising instincts have been good.
“We think consumers are responding positively to the Back-to-School merchandise,” Graves wrote in a PacSun research note.
—A.A.
