Teen retailer Pacific Sunwear of California Inc. said Monday that the company posted a first-quarter loss, citing the shutdown of 74 underperforming demo stores.
For the three months ended May 5, PacSun lost $5.1 million, or 7 cents a share, compared with income of $11.9 million, or 16 cents, in the same year-ago quarter. The company said that the loss was partly tied to lease termination charges and additional inventory impairment costs in connection with the closing of the demo stores. Sales rose 6.9 percent to $320.6 million from $299.9 million, but total company same-store sales fell 1.2 percent. By nameplate, PacSun comps inched up 0.5 percent, but demo stores — 152 will be operating after all the closings — fell 12.1 percent.
"Although we ended the quarter with a difficult April, we exited the month with an improved inventory position and an encouraging juniors business trend," interim chief executive officer Sally Frame Kasaks said in a statement.
"We continue to believe that there is tremendous opportunity to grow our juniors business with the incremental fashion component that you see in the stores today," Kasaks said during a conference call to Wall Street after the financial markets closed. She noted that baby doll tops and tanks have been well received by customers, and that the ratio of tops to bottoms has improved "dramatically year-over-year."
PacSun is committed to reconnecting with its core customer, which means "ongoing customer research, continuous feedback from our junior team panel, having the right product in the stores and directed marketing that positions PacSun as a board sport inspired shopping destination," Kasaks said.
The company expects to permanently fill its ceo spot by the end of the second quarter, she said.
PacSun said it was "comfortable" with its previously stated second-quarter outlook of earnings per share between 18 cents and 20 cents a diluted share. Included in that outlook is a presumption of a low single-digit second-quarter same-store sales increase.
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