PacSun said Thursday that holiday sales came in under plan, and the company lowered its guidance for the fourth quarter.
While November started out strong, business in the first three weeks of December was “significantly” below expectations, PacSun said.
Sales did improve closer to Christmas and after the holiday, however it was not enough to offset slower traffic trends in the earlier part of the month and soft denim sales.
The company now expects:
Same store sales of flat to up 1% – previously the company had forecast an increase of 1% to 5%.
Revenue of $211 million to $214 million – previously the company had forecast $216 million to $225 million.
Gross margin of 19% to 20% – previously the company had forecast gross margin of 21% to 24%.
Loss per share of continuing operations of 21 cents to 18 cents – previously the company had forecast a loss per share of 17 cents to 12 cents.
PacSun’s stock is down 20% in trading this morning to $2.72.
One of PacSun’s main competitors at the mall, the Hollister chain owned by Abercrombie & Fitch, kept its store at 50% off everything for most of the holiday season as the struggling company looked to move through inventory before heading into the new year.
Abercrombie reported Thursday that holiday sales of all chains combined declined 6%, which was better than the high-double digit decrease expected.
As a result of the better than expected sales and cost cutting, the company raised its fourth quarter guidance today.
