PacSun profit picture challenging as Q4 comps rise

Pacific Sunwear overcame weak mall traffic and bad weather to log its eighth consecutive quarter of same-store sales growth with a 2% comp increase in the fourth quarter.

The teen and young adult retailer said sales from continuing operations during the quarter ended Feb. 1 totaled $218.6 million compared to sales of $222.8 million during the fourth quarter the prior year, a period which included the benefit of an additional week which added sales of $9 million. PacSun ended its most recent fiscal year with 618 stores compared to 644 in the year earlier period.

"We continue to be encouraged by our positive momentum within a challenging retail environment throughout the year, marked by eight straight quarters of positive comparable store sales, sustained gross margins, and reduced operating costs, all contributing to a significant improvement in our operating performance compared to fiscal 2012," said Gary H. Schoenfeld, PacSun’s president and CEO. "Looking ahead to fiscal 2014, our key priorities include showcasing our premium brand portfolio through curated assortments, managing inventory with on-trend fashion and speed to market, and continuing to elevate both our in-store and digital experience.”

Despite some modest top line growth and store base purged of underperforming units, PacSun continued to lose money in the fourth quarter. The company reported a loss from continuing operations of $22 million, or 32 cents a share, slightly better than a prior year fourth quarter loss of $22.2 million, or 32 cents a share.

On an adjusted basis to exclude non-recurring expenses, the financial situation didn’t look much different. The adjusted loss from continuing operations was $11.8 million, or 17 cents a share, compared to a loss of $11.6 million, or 17 cents a share.

For the full year, the company’s sales from continuing operations were $797.8 million versus $784.7 million the prior year. Full year comps rose 2%.