Here’s the earnings release. More to come from conference call this afternoon. Same-store sales forecast for the first quarter is at the bottom of the release.
Pacific Sunwear Announces Fourth Quarter Earnings Results; Issues First Quarter Guidance
Thursday March 12, 4:01 pm ET
Company Highlights Actions Taken in Fiscal 2008 to Improve Long Term Profitability
ANAHEIM, Calif., March 12, 2009 (GLOBE NEWSWIRE) — Pacific Sunwear of California, Inc. (NasdaqGS:PSUN – News) today announced that total sales for the fourth quarter (13 weeks) of fiscal 2008 ended January 31, 2009, were $351.7 million, a decrease of 8.5 percent from total sales of $384.3 million for the fourth quarter (13 weeks) of fiscal 2007 ended February 2, 2008. Total Company same-store sales decreased 10 percent during the fourth quarter of fiscal 2008.
For the fourth quarter of fiscal 2008, the Company recorded a loss from continuing operations of $27.6 million compared to income from continuing operations of $19.6 million for the fourth quarter of fiscal 2007. Fourth quarter results for each period exclude the results from demo and One Thousand Steps due to the designation of these divisions as discontinued operations during the first quarter of fiscal 2008 and the fourth quarter of fiscal 2007, respectively. Results for the fourth quarter of fiscal 2008 include the pre-tax gain on the sale of the Company’s closed Anaheim distribution center of $9.7 million and a pre-tax, non-cash impairment charge of $4.6 million associated with a reduction in the fair value of certain land that was held by the Company for sale during the quarter.
“While we are disappointed with our operating results for fiscal 2008, we accomplished several key objectives focused on reducing inventory levels, managing costs and preserving our liquidity in this challenging retail environment,’ commented Sally Frame Kasaks, Chief Executive Officer. “We expect the retail industry will continue to face significant challenges in 2009, but we believe that we have taken appropriate and decisive steps to help us improve profitability in the long term.’
2008 Accomplishments
During fiscal 2008, the Company accomplished several strategic and business objectives, including the following:
* Closed the Company’s underperforming demo business, thereby
allowing the Company to focus solely on its core PacSun concept;
* Exited the Company’s underperforming and lowest margin sneaker
category to focus its merchandising efforts on its higher margin,
faster turning apparel business;
* Consolidated to a single distribution center to lower costs,
enhance efficiency and improve time to market within the
Company’s supply chain;
* Implemented a series of actions to better position the Company in
the current economic environment, including significantly
reducing inventory levels and planned capital expenditures and
SG&A expenses for fiscal 2009;
* Exceeded the Company’s goal for fiscal 2008 of apparel
representing at least 80% of its merchandise mix, with its
Juniors’ business accounting for 50% of its apparel assortment;
* Established a $150 million, asset-backed credit facility with JP
Morgan and Bank of America as its primary lenders; and
* Ended fiscal 2008 with nearly $25 million in cash on the balance
sheet and no direct borrowings under the Company’s credit
facility.
Full Year Results
Total sales for fiscal 2008 (52 weeks) ended January 31, 2009 were $1,254.9 million, a decrease of 3.9 percent from total sales of $1,306.0 million during fiscal 2007 (52 weeks) ended February 2, 2008. Total Company same-store sales decreased 5 percent during fiscal 2008.
For fiscal 2008, the Company recorded a loss from continuing operations of $39.4 million compared to income from continuing operations of $45.6 million in fiscal 2007. Results for fiscal 2008 include the previously announced non-cash, pre-tax asset impairment charge of $8.0 million incurred in the first quarter related to the materials handling equipment in the Company’s closed Anaheim distribution center, the non-cash, pre-tax goodwill impairment charge of $6.5 million incurred in the third quarter, the pre-tax gain on the sale of the Company’s closed Anaheim distribution center of $8.7 million, and a pre-tax, non-cash impairment charge of $4.6 million, associated with a reduction in the fair value of certain land that was held by the Company for sale during the fourth quarter.
Financial Outlook for First Fiscal Quarter of 2009
As previously announced, the Company is now providing earnings guidance only on a quarter-to-quarter basis due to the unprecedented and uncertain nature of the current economic and consumer environment. Assuming a same-store sales decline in the negative low-twenty percent range for the first quarter, the Company expects to report a loss of $(0.26) to $(0.31) per diluted share for the first quarter of fiscal 2009.
