Pacific Sunwear Shows First Positive Comps in Years
For the first time in almost four years, Pacific Sunwear of California Inc. announced positive same-store sales for an entire fiscal quarter.
The Anaheim, Calif.–based mall retailer reported May 24 that same-store sales increased 1 percent for the first quarter in 2011 compared with the same period last year. During the past few years, PacSun has reported positive same-store sales during isolated months, but the occasional gains could not push same-store sales into the black for an entire quarter.
“We are still a long way from popping any champagne,” said Gary Schoenfeld, PacSun’s president and chief executive, who joined the company in June 2009. “But I have to say it felt good to end the quarter with a plus sign in the comp-sales column for the first time since Q4 [fourth quarter] of 2007.”
However, PacSun reported net sales for the first quarter of 2011 were $186 million, a 2 percent decline from net sales of #8232;$190 million during the same period last year.
Same-store sales for women’s and juniors fashions increased 4 percent during the first quarter of 2011, pushing that category’s sales into the black for PacSun, which has traditionally maintained its merchandising strength in young men’s clothing.
“We have revamped our approach to the women’s business,” Schoenfeld said. PacSun has focused more on being “trend right” in women’s fashions since Christine Lee was hired as PacSun’s general merchandise manager and senior vice president in February 2010.
Schoenfeld illustrated this new focus with women’s T-shirts. Before 2010, PacSun sold traditional women’s T-shirts bearing logos and graphics of surf and skate companies. Recently, the retailer has offered T-shirts with different fabrications and fits for women.
However, same-store sales for men’s fashions declined 3 percent in the first quarter. Schoenfeld blamed unseasonably cool weather for poor sales in boardshorts and sandals. “[Men’s sales] had positive comps in the southern half of the country compared to the northern half, [where] the kickoff for spring and summer has yet to materialize.”
The one-quarter gain in same-store sales still wasn’t convincing some analysts that the company is headed for positive territory. Retail analyst Christine Chen of Needham & Co. in San Francisco said, “We’d like to see more evidence that a margin recovery is underway or stronger sales momentum before we become more positive on the stock.”
Memorial Day weekend is the launching point for a higher PacSun profile. The retailer is debuting a campaign of television ads, called “Dress Irresponsibly,” to be screened on MTV and Comedy Central throughout the summer. The ads could have an effect on PacSun’s second quarter. The forecast for same-store sales ranges from a decline of 3 percent to an increase of 2 percent. —Andrew Asch
