NEW YORK — Weighed down by sagging same-store sales, Pacific Sunwear reported a 32.4 percent decline in first-quarter profits.
Net income for the quarter ended April 30 fell to $11.9 million, or 16 cents a diluted share, from $17.6 million, or 23 cents, in the same period last year on sales that rose 7.1 percent, to $299.9 million from $280 million. Same-store sales for the quarter declined 1.8 percent. Earnings per share included a 3 cent per share adjustment for stock options as well as pre-opening rent expenses.
“Although the quarter was difficult, I’m encouraged with the improvement we achieved in our sales trend in April,” said Seth Johnson, chief executive officer of the Anaheim, Calif., specialty retailer. “In April, we also successfully launched our latest retail concept, One Thousand Steps. We now have six stores open and are pleased with the initial customer response to our merchandise assortment and store design.”
The retailer said if it can deliver a “low- to mid-single-digit” same-store sales gain for the second quarter, earnings should be 26 to 28 cents a share. That estimate includes a 3 cent per share adjustment for stock option expenses and pre-opening rent expenses. For the full year, the retailer said it is “comfortable with EPS growth estimates of 10 to 15 percent.”
Pacific Sunwear said it repurchased 1.7 million shares during the first quarter at about $22.45 each. The buyback is part of a $100 million share repurchase program. At the close of the quarter, the company had $11.7 million left for buying more shares.
The retailer operates 820 PacSun stores, 97 outlets, 200 d.e.m.o. stores and five One Thousand Steps stores.
This story first appeared in the May 12, 2006 issue of WWD. Subscribe Today.