Pacific Sunwear loss widens in fiscal 2nd quarter as revenue declines, 3Q outlook weak

Pacific Sunwear fiscal 2Q loss widens, shares fall

ANAHEIM, Calif. — Teen retailer Pacific Sunwear of California Inc. posted a wider loss in its fiscal second quarter as sales fell 10 percent and issued a third-quarter outlook that partly fell below analyst expectations.

Shares slid 6 percent in after-hours trading on the news.

Pacific Sunwear reported a loss of $23.5 million, or 36 cents per share, in the three-month period ended July 31. That compares with a loss of $14.2 million, or 22 cents per share, in the year-ago quarter. Excluding a tax-related charge, losses totaled $15 million, or 22 cents per share, in the latest period.

Revenue dropped to $218.3 million from $242.8 million last year, but the company said buying trends in its young men’s division improved. The company didn’t disclose back-to-school sales trends. Teen retailers have been struggling amid the weak economy to win sales, with promotions remaining elevated for rivals such as Aeropostale, American Eagle and Wet Seal.

The results came in slightly better than the 23-cent-per-share loss and $213.3 million in revenue that analysts had expected, according to a Thomson Reuters poll.

However, revenue at stores open at least a year — a key figure for retailers — fell 10 percent in the period. That’s an important measurement of a retailer’s health because it measures growth at existing stores, rather than including new ones.

And for the third quarter, the company forecast an adjusted loss of 9 cents to 16 cents per share, compared with a loss of 12 cents as forecast by analysts. Revenue at stores open at least a year is expected to fall 4 percent to 9 percent.

Over the rest of year the company expects revenue at stores open at least a year to improve sequentially, with the possibility of positive growth in the fourth quarter. Capital expenditures for the year are now projected at the lower end of its previous guidance range of $20 million to $30 million.

Shares fell 25 cents, or 6 percent, to $3.80 in after-hours trading Tuesday. In regular trading shares closed down 7 cents to $4.05.