PacSun Q1 Revenues Off 16.2%
mike lewis
- May 21 2009
- 455 views
- 3 comments
Pacific Sunwear of California, Inc. (Nasdaq:PSUN) today announced that net sales for its first quarter ending May 2, 2009 were $223.5 million versus $266.9 million for the first quarter of fiscal 2008, a drop of 16.2 percent. Same-store sales for the period decreased 18 percent.
This translated to a net loss of $8.7 million, or $(0.13) per diluted share, for the period compared to a net loss from continuing operations of $12.0 million, or $(0.17) per diluted share, in fiscal 2008. The reduction is largely attributed to cuts in SG&A and increased margins.
During their first quarter earnings call this afternoon, CEO Sally Frame Kasaks and CFO Mike Henry hit on the following highlights:
- Margins were up 140 basis points.
- Inventory is down 31 percent in dollars. “Inventory is very fresh righ now,” says Kasaks.
- The company currently has $104 million in working capital, $32 million in cash, and no credit facility borrowings.
- Apparel sales accounted for 88 percent of all revenue and were down 7 percent.
- Denim sales, especially of Bullhead, were a major highlight for the quarter.
- Tops and T’s were also fairly strong for the quarter. The company is increasing its mix of organics and MMA brands by region.
- Fleece is expanding as a category, particularly in the $39.50-59.50 range.
- The swim and boardshorts categories continued to show weakness for a second year running.
- The company was able to cut SG&A costs by $19 million for the quarter.
- A continued focus is being placed on its “Value” stores, which it now has 422 of, generally located in areas with a lower economic base. The company operates 525 “Core” stores as well.
- PacSun is becoming more sensitive to opening price points in all stores.
- Kasaks believes they may have cut accessory inventories (12% of revenue for the quarter) too deeply and sees an opportunity for an expansion there.
- Pacsun.com will continue to play an increasing role in the company’s performance.
Financial Outlook for Second Fiscal Quarter of 2009
Kasaks says that the “environment will remain challenging for the foreseeable future, and the company is projecting a same-store sales percentage decline in the range of 17 to 20 percent, and a loss of $(0.11) to $(0.17) per diluted share for the second quarter of fiscal 2009. Kasaks added that predicting sales has been “problematic at best,” but they feel very confident in their cash position going forward.
Here are the full financial results for the quarter:
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except share and per share data)
First Quarter Ended
-----------------------
05/02/09 05/03/08
---------- ----------
Net sales $ 223,465 $ 266,867
Gross margin 61,274 75,465
Selling, G&A expenses 76,769 95,812
---------- ----------
Operating loss from continuing operations (15,495) (20,347)
Other expense (income), net 229 (758)
---------- ----------
Loss from continuing operations before income
taxes (15,724) (19,589)
Income tax benefit (6,981) (7,620)
---------- ----------
Loss from continuing operations (8,743) (11,969)
Loss from discontinued operations, net of tax
benefit -- (25,133)
---------- ----------
Net loss $ (8,743) $ (37,102)
========== ==========
Loss from continuing operations per share:
Basic $ (0.13) $ (0.17)
========== ==========
Diluted $ (0.13) $ (0.17)
========== ==========
Net loss per share:
Basic $ (0.13) $ (0.53)
========== ==========
Diluted $ (0.13) $ (0.53)
========== ==========
Weighted average shares outstanding:
Basic 65,207,991 69,915,802
========== ==========
Diluted 65,207,991 69,915,802
========== ==========
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
05/02/09 01/31/09 05/03/08
-------- -------- --------
ASSETS
Current assets:
Cash & cash equivalents $ 32,274 $ 24,776 $ 42,645
Inventories 115,518 107,205 167,508
Other current assets 49,601 58,943 87,808
-------- -------- --------
Total current assets 197,393 190,924 297,961
Property and equipment, net 312,896 323,344 365,561
Other long-term assets 46,809 55,241 39,653
-------- -------- --------
Total assets $557,098 $569,509 $703,175
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 53,913 $ 45,263 $ 72,711
Other current liabilities 39,161 47,564 70,820
-------- -------- --------
Total current liabilities 93,074 92,827 143,531
Deferred lease incentives 49,155 52,313 61,375
Deferred rent 22,730 23,008 25,261
Other long-term liabilities 29,244 29,374 35,190
-------- -------- --------
Total liabilities 194,203 197,522 265,357
Total shareholders' equity 362,895 371,987 437,818
-------- -------- --------
Total liabilities and shareholders'
equity $557,098 $569,509 $703,175
======== ======== ========
PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(unaudited, in thousands)
FIRST QUARTER ENDED
05/02/09 05/03/08
-------- --------
Cash flows from operating activities:
Net loss $ (8,743) $(37,102)
Depreciation & amortization 17,099 21,647
Asset impairment 1,992 8,503
Non-cash stock based compensation 955 1,289
Tax deficiencies related to exercise of stock
options (1,297) (388)
Loss on disposal of property and equipment -- 687
Changes in operating assets and liabilities:
Inventories (8,313) 2,674
Accounts payable and other current liabilities 387 10,917
Other assets and liabilities 10,528 (32,856)
-------- --------
Net cash provided by/(used in) operating
activities 12,608 (24,629)
Cash flows from investing activities:
Capital expenditures (8,813) (21,006)
Proceeds from sale of land 3,705 --
-------- --------
Net cash used in investing activities (5,108) (21,006)
Cash flows from financing activities:
Repurchases of common stock -- (10,248)
Proceeds from exercise of stock options -- 944
Net repayments under long-term leases (2) (3)
-------- --------
Net cash used in financing activities (2) (9,307)
-------- --------
Net increase/(decrease) in cash and cash
equivalents 7,498 (54,942)
Cash and cash equivalents, beginning of period 24,776 97,587
-------- --------
Cash and cash equivalents, end of period $ 32,274 $ 42,645
======== ========
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SELECTED STORE OPERATING DATA
Fiscal 2009 Fiscal 2008
----------- -----------
Stores open at beginning of fiscal year 932 1,107
Stores opened during the period -- 3
Stores closed during the period 5 (168)
----------- -----------
Stores open at end of period 927 942
Note: Fiscal 2008 store closures include 153 demo stores. demo became
a discontinued operation during the first quarter of fiscal
2008.
05/02/09 05/03/08
---------------- ----------------
Square Square
# of Footage # of Footage
Stores (000s) Stores (000s)
---------------- ----------------
PacSun Core stores 525 2,086 540 2,105
PacSun Value stores 402 1,491 402 1,491
---------------- ----------------
Total stores 927 3,577 942 3,596
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May 22nd, 2009 at 4:58 am
thanks for boiling down the mublejumble fo thesw figures and using them pointedly to diddle some useable info out of this fair maidens high end dribble.