NEW YORK — Capitalizing on strong sales in its young women’s and accessories divisions, Pacific Sunwear of California delivered a 79 percent increase in its third-quarter net income.
The Anaheim, Calif.-based specialty retailer, which has been reporting stronger sales growth than most of its teen-targeted peers, reported income of $15.9 million, or 48 cents a diluted share, in line with raised consensus estimates, for the three months ended Nov. 2. In the year-ago quarter, income reached $8.9 million, or 27 cents a share. Sales for the quarter rose 24.7 percent to $228.2 million. Comparable-store sales increased 11.7 percent, with PacSun up 11.6 percent and Demo up 12.5 percent.
"The fall merchandise was well received in both divisions," Greg Weaver, chairman and chief executive, said in an afternoon conference call with Wall Street analysts. "We seem to be gaining market share with the help of multiple brands, and also feel our private brands are on target."
By merchandise category, all divisions reported a gain in comps: Footwear sales were up 25 percent; young women’s, 17 percent; accessories, 15 percent, and young men’s, 4 percent.
Weaver noted that growing the girls’ business remains one of PacSun’s major initiatives. For the first nine months of the year, girls’ business represented 42 percent of apparel sales and the company plans to grow it to 45 percent by the end of the year. Last year, the division was 38 percent of sales.
While a number of factors may put pressure on holiday sales goals — including this year’s late Thanksgiving, which leaves six fewer shopping days between that holiday and Christmas than last year — Weaver said he is optimistic about the business. He said comps for the first eight days of the month were up 13 percent, but warned that he doesn’t expect that performance to continue. He said he expects overall November comps to range from flat to up 2 percent, with December same-store results coming in 3 percent to 4 percent ahead of last year. He reiterated the company’s fourth-quarter earnings forecast of 50 cents a share, a penny short of what Wall Street analysts were expecting. For 2003, he said he is anticipating 20 percent earnings growth, which would bring per-share earnings in at a range of $1.55 to $1.57, with comps up 3 percent.For the nine-month period, income nearly doubled to $26.5 million, or 79 cents a diluted share, when compared with income of $13.4 million, or 41 cents a share, last year. Sales for the period increased 21.7 percent to $580.8 million. Comps increased 7.1 percent, with PacSun up 7.3 percent and Demo up 5.3 percent.
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