NEW YORK — Pacific Sunwear of California shined brightly Monday.
This story first appeared in the November 11, 2003 issue of WWD. Subscribe Today.
The teen destination store, releasing figures after the markets closed, reported a 54.1 percent gain in its third-quarter profits, driven by double-digit sales gains at both its retail concepts.
For the three months ended Nov. 1, the Anaheim, Calif.-based retailer said income increased to $24.5 million, or 31 cents a diluted share. That compares with income of $15.9 million, or 21 cents, in the like period last year, and to company and Wall Street estimates of 29 cents.
Sales for the three months surged 23.2 percent to $281.3 million from $228.2 million, while same-store sales rose 13.8 percent for the quarter, consisting of a 13.2 percent gain at its PacSun stores and a 19.9 percent boost at Demo. Inventories rose 13 percent.
“We have made great strides in all product areas,” Greg Weaver, chairman and chief executive, said on an afternoon conference call, noting footwear comps grew more than 20 percent and accessories increased 20 percent. Young men’s was up in the mid-single digits and girls’ managed a low-double-digit increase.
The girls’ business has been a key driver of PacSun’s mounting success, as the firm has grown the business to capture females’ more frequent mall visits and the increased likelihood they would shop for outfits and accessorize them. Weaver said the two genders’ sales activity is running about 50/50 and that he expects girls’ to surpass men’s.
Timothy Harmon, president and chief merchandising officer, said on a company conference call, “The success at back-to-school is going to be even a stronger piece of business going forward.” Fleece was critical, and the firm has added new brands and expanded some of last year’s skate brands into the girls’ unit.
Weaver said he is comfortable with the fourth-quarter consensus earnings estimate of 37 cents, which is based on the firm’s assumption of a 5 to 6 percent comp increase in the quarter.
Weaver said he expects to open 14 new stores in the fourth quarter, 13 of which will be PacSun stores, ending the year with 877 stores. In 2004, he said he is looking to add 100 new stores, 65 PacSun, 5 outlet and 30 Demo doors, ending the year with 977 units. It currently operates 863 doors, including 664 PacSun stores, 78 PacSun outlet stores and 121 Demo stores.
For the nine months, income rocketed 73.3 percent to $45.9 million, or 59 cents, versus income of $26.5 million, or 35 cents, in the comparable period last year. Sales soared 22.9 percent to $714 million from $580.8 million as comps rose 13.7 percent, with PacSun up 12.4 percent and Demo up 25.5 percent.