PacSun Narrows Q1 Loss Despite Double-Digit Comp Declines

Pacific Sunwear of California, Inc. saw net sales decline 16.3% to $223.5 million for the fiscal first quarter ended May 2 from net sales from continuing operations of $266.9 million for the year-ago period. Total company same-store sales decreased 18% during the period.

The company recorded a net loss of $8.7 million, or a loss of 13 cents per diluted share, for the first quarter of fiscal 2009 compared to a net loss from continuing operations of $12.0 million, or a loss of 17 cents per diluted share, for the first quarter of fiscal 2008.

“While we continue to face a very difficult sales environment, we are pleased with the results of our efforts to manage expenses and inventories. We ended the quarter with $32 million in cash and no credit facility borrowings,'' commented Sally Frame Kasaks, Chief Executive Officer. “We are cautious about business in future quarters but remain singularly focused on executing our strategies.''

Assuming a same-store sales percentage decline in the range of 17% to 20%, the company currently expects to report a loss of 11 cents to 17 cents per diluted share for the second quarter of fiscal 2009.

                   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)

                                               ==========   ==========