Press Release:
ANAHEIM, Calif., May 20, 2010 (GLOBE NEWSWIRE) — Pacific Sunwear of California, Inc. (Nasdaq:PSUN – News) (the “Company”) today announced that net sales for the first quarter of fiscal 2010 ended May 1, 2010, were $190 million versus net sales of $223 million for the first quarter of fiscal 2009 ended May 2, 2009.
Total Company same-store sales decreased 15% during the period.
For the first quarter of fiscal 2010, the Company reported a net loss of $31 million, or $(0.47) per share, compared to a net loss of $9 million, or $(0.13) per share, for the first quarter of fiscal 2009.
Results for the first quarter of fiscal 2010 reflect the continuing impact of a valuation allowance against the Company’s deferred tax assets. On a non-GAAP basis, using a normalized 36.4% income tax rate, the Company’s net loss for the first quarter was $20 million, or $(0.30) per share.
The Company ended the quarter with cash of $57 million and no borrowings under its credit facility.
“Our first quarter results were at the higher end of our expectations led by improving trends in our Young Mens business and better than expected merchandise margins in both Young Mens and Juniors,” stated Gary H. Schoenfeld, President and Chief Executive Officer.
“While having a lot still to accomplish, we continue to be optimistic about the prospects for sequential quarterly improvements and achieving the targets we outlined at the beginning of the year.”
Financial Outlook for Second Quarter of Fiscal 2010
The Company expects to report a GAAP net loss per share of $(0.35) to $(0.45) for the second quarter of fiscal 2010 which will reflect the continuing impact of maintaining a valuation allowance against deferred tax assets and a very low effective tax rate.
On a non-GAAP basis, using a normalized income tax rate of approximately 36% to 37%, the Company expects a net loss of $(0.22) to $(0.28) per share for the second quarter of fiscal 2010. The forecasted second quarter GAAP earnings range is based on the following significant assumptions:
Same-store sales decline of 9% to 14%;
Gross margin rate, including buying, distribution and occupancy costs, of 21% to 24%;
SG&A expenses in the range of $72 million to $75 million;
As the Company no longer records income tax benefits against its operating losses, tax expense will be approximately $300,000 due to taxable income projected to be generated in certain state and local tax jurisdictions.
About Pacific Sunwear of California, Inc.
Pacific Sunwear is a leading specialty retailer rooted in the California lifestyle. The Company sells casual apparel with a limited selection of accessories and footwear designed to meet the needs of teens and young adults.
As of May 1, 2010, the Company operated 758 PacSun stores and 125 PacSun Outlet stores for a total of 883 stores in 50 states and Puerto Rico. PacSun’s website address is www.pacsun.com.
The Company will be hosting a conference call today at 4:30 pm Eastern time to review the results. A telephonic replay of the conference call will be available, beginning approximately two hours following the call, for one week and can be accessed in the United States/Canada at (800) 642-1687 or internationally at (706) 645-9291; pass code: 74311650. For those unable to listen to the live Web broadcast or utilize the call-in replay, an archived version will be available on the Company’s investor relations website through midnight, August 18, 2010.
About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles, please see the accompanying table titled “Reconciliation of Selected GAAP Measures to Non-GAAP Measures” and the section following such table titled “About Non-GAAP Financial Measures.”
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