NEW YORK — Benefiting from sales in its female apparel and accessories businesses, Pacific Sunwear of California turned up the teen heat as first-quarter income swelled 144.5 percent.
This story first appeared in the May 13, 2003 issue of WWD. Subscribe Today.
The Anaheim, Calif.-based sun-and-sand-oriented teen retailer said late Monday that for the three months ended May 3, net income rose to $8 million, or 16 cents a diluted share, 2 cents ahead of Wall Street’s average estimates. In last year’s quarter, the retailer’s profits were $3.3 million, or 7 cents. Total sales for the quarter surged 22.6 percent to $198.3 million over $161.7 million, while overall comps increased 13.2 percent.
“We made great progress in our operations,” Greg Weaver, chairman and chief executive, said on a conference call. “Both concepts posted comp increases in all key categories.”
In advance of the results, which came after the markets closed on Monday, investors sent PacSun’s stock to a new 52-week high. Shares rose $1, or 4.1 percent, to close Monday at $24.34 after hitting $24.45 in intraday trading. The previous high was $23.99, reached on May 8.
Specifically at PacSun, female apparel continued its surge with comps in the “strong double-digit” range. Footwear was up in the low-double digits, accessories in the mid-teens and men’s was slightly positive.
The company, which operates 808 stores under the PacSun and Demo nameplates, said it will continue to aggressively grow its girls’ division, noting that the unit comprised 48 percent of overall apparel sales in the first quarter, compared with 45 percent in the fourth quarter. It also said it anticipates the figure to grow to 50 percent in 2003.
Timothy Harmon, president and chief merchandising officer, said although screen-printed T-shirts and bottoms are performing well in the female arena, he sees growth opportunity in cut and sewn tops, including knits, wovens and sweaters.
PacSun is one of only a few teen retailers enjoying rapid growth at the moment. And while the spring/summer season usually brings the surf look to the windows of its teen peers, company executives said its success selling the beach look, even during the back-to-school and holiday selling seasons, only validates its product offerings.
Its Demo division delivered a 36.5 percent increase in its comps during the quarter, causing the firm to rethink its growth plan. Weaver said he believes that 200 doors by the end of 2005, as opposed to the 109 currently in operation, is a conservative target for the unit.