A slight same-store sales increase wasn’t enough to prevent Pacific Sunwear of California Inc. from recording a wider first-quarter loss, as it continued to struggle with merchandising and marketing obstacles.

This story first appeared in the May 25, 2011 issue of WWD. Subscribe Today.

The Anaheim, Calif.-based firm also issued second-quarter guidance that fell below Wall Street’s expectations Tuesday.

For the three months ended April 30, PacSun’s net loss grew to $31.5 million, or 48 cents a diluted share, compared with a loss of $31 million, or 47 cents a share, in the year-ago quarter. Excluding the impact of a valuation allowance against deferred tax assets, the loss was 30 cents, 3 cents better than the 33-cent loss expected by analysts surveyed by Yahoo Finance.

Net sales slid 2.4 percent, to $185.8 million from $190.3 million, a year earlier. Comparable-store sales rose 1 percent after declining 8 percent during fiscal 2010. Gross margin for the quarter declined to 19.1 percent of sales versus year-ago margin of 22.3 percent.

Comps in the once-ailing women’s business rose 4 percent, while in the men’s division, quarterly comps fell 3 percent, due partially to weakness in boardshorts.

“I think in many cases two of the toughest parts of any turnaround have to do with talent and culture and reversing what’s by definition a systemic decline in sales,” said president and chief executive officer Gary Schoenfeld on the company call, explaining that the firm has “completely transformed” its women’s merchandising and design business. “We have closed nearly 100 stores, rebuilt critical brand relationships and, perhaps most importantly, we are creating a new culture within PacSun based upon creativity, collaboration, trust and a huge desire to win.”

Despite its optimism about its women’s business, the retailer said it expects a second-quarter loss, excluding special items, of between 22 cents and 29 cents a share, steeper than analysts’ prediction of an 18-cent loss.

Shares closed at $3.16, down 7 cents, or 2.2 percent, Tuesday. Results were disclosed after the trading day ended.

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