PacSun Expecting Slow Back-to-School-Season
Pacific Sunwear of California Inc. reported positive same-store sales for its second fiscal quarter, but that didn’t leave the company optimistic.
Chief Executive Gary H. Schoenfeld said he didn’t think the positive sales growth would continue.
“Until recently, we had expected this positive momentum to continue,” he said in a statement. “Yet we are now more cautious in our near-term outlook due to a combination of factors, including macroeconomic pressure, along with a highly promotional start to the Back-to-School season.”
On Aug. 23, PacSun reported same-store sales for its second fiscal quarter increased 1 percent over the same period last year.
PacSun had asecond-quarter net loss of $19.3 million on revenues of $214.9 million, compared with a net loss of $23.5 million on revenues of $218.3 million for the same period last year.
Wall Street analysts recently gave PacSun good marks for improving its merchandising and for controlling its inventory. Its recent improvements in same-store sales were hard won and came after consistent same-store-sales declines from 2007 to 2010.
With an iffy economic climate ahead, Schoenfeld lowered his third-quarter estimates for the mall-based retailer, which creates surf and skate fashions out of its headquarters in Anaheim, Calif.
Schoenfeld said he believes same-store sales in the third quarter will be in the mid-to-high negative single digits. The company’s guidance range for the third quarter was for a net loss of 16 cents to 29 cents a share.
That guidance range was a bad sign for the company, according to Adrienne Tennant, an analyst with financial-services firm Janney Capital Markets.
“This is a significant disappointment, as it suggests a reversal in trends from the Spring season and ongoing market share losses to competitors,” Tennant wrote in an Aug. 24 research note.
Wall Street analyst Christine Chen of Needham & Co. wrote that a struggling economy was hurting PacSun. “[Back-to-School] has gotten off to a slow start,” she wrote.
