Pacific Sunwear of California Inc. (PSUN) posted fiscal 2009 fourth quarter results after the closing bell on Thursday. The company recorded a wider GAAP net loss of $36.5 million, or 56 cents per share, compared to a loss of $27.0 million, or 42 cents per share in the prior year quarter. Excluding special items, adjusted loss per share came in at 26 cents, ahead of the Zacks Consensus Estimate of a 29-cents loss.
However, Pacific Sunwear offered a disappointing fiscal 2010 first-quarter guidance and expects to post an adjusted net loss of 32 cents to 38 cents per share during the first quarter of fiscal 2010 assuming a 13% to 18% decline in same-store sales. The guidance is well behind the Zacks Consensus Estimate of a loss of 15 cents per share, which worsened by a penny over the past month. Shares of Pacific Sunwear plunged 89 cents or more than 15% to $4.86 on Friday on the Nasdaq.
Meanwhile, net sales slipped 17% to $292.6 million during the quarter, compared to $351.7 million in the year-ago period. The decline was primarily caused by a 19% reduction in same-store sales coupled with the closure of 38 stores in last one year.
Pacific Sunwear’s gross profit recorded a growth of 16.9% year-over-year to $66.2 million, while gross margin increased by 650 basis points (bps) to 22.6%. The growth was primarily driven by improved merchandise margins, partially offset by the deleveraging impact of buying and occupancy costs on lower sales.
Selling, general and administrative expenses reduced 5.6% to $94.3 million due to lower store payroll and depreciation expenses. Pacific Sunwear posted a narrower operating loss of $28.1 million during the quarter, compared to a loss of $43.2 million in the year-ago quarter as the slump in revenues was partially offset by higher gross margin and lower overheads.
The company ended the quarter with cash and cash equivalents of $93.1 million, compared to $24.8 million in the year-ago period. During fiscal 2009, Pacific Sunwear generated $87.4 million of cash from operations and deployed $23.5 million towards capital expenditure.
Meanwhile, the Zacks Consensus Estimate on the company’s earnings for the year ending January 2011 has worsened by a penny over the past month to a loss of 47 cents per share as 1 of 8 covering analysts lowered expectations.
Pacific Sunwear is a lifestyle specialty retailer and offers casual apparel with a limited selection of accessories and footwear targeted towards teens and young adults. The company operates a nationwide, primarily mall-based chain of retail stores, under the names “Pacific Sunwear” and “PacSun”. As of January 30, 2010, the company operated 894 stores in 50 states and Puerto Rico.
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