Pacific Sunwear Q3 Net Income Up 30%

Pacific Sunwear of California Inc. reported net income for the third quarter increased 30% to $31.9 million, or 42 cents per diluted share, compared to $24.5 million, or 31 cents per diluted share, for the third quarter of fiscal 2003.

Total sales for the third quarter of fiscal 2004 (13 weeks) were $329.1 million, an increase of 17.0% over total sales of $281.3 million for the third quarter of fiscal 2003 (13 weeks). Company same store sales increased 6.6% for the third quarter of fiscal 2004 with PacSun same-store sales up 6.8% and d.e.m.o. same-store sales up 4.8%.

“I am pleased to report another strong earnings quarter in 2004 for Pacific Sunwear,” stated Greg Weaver, chairman and CEO. “Third quarter earnings were up 30% and operating margin increased to 15.5% vs. 14.0% last year. Year to date, our operating margin has increased to 12.4% vs. 10.3% last year.

“Our same-store sales guidance for the fourth quarter is for same store sales growth of 5%. We are comfortable with the current consensus earnings per share estimates of analysts for the fourth quarter of fiscal 2004 of $0.52. This takes our full year fiscal 2004 earnings per share guidance to $1.36.

“As previously announced, Seth Johnson has joined Pacific Sunwear as of November 1st as Chief Operating Officer and as a member of our Board of Directors. We are pleased to have him on board,” concluded Weaver.

Net income for the first nine months of fiscal 2004 was $66.2 million, or $.87 per share, basic, and $.85 per share, diluted, an increase of 44% over net income of $45.9 million, or $.60 per share, basic, and $.59 per share, diluted, for the first nine months of fiscal 2003. Total sales for the nine months of fiscal 2004 were $849.0 million, an increase of 18.9% over total sales of $714.0 million for the nine months of fiscal 2003. Company same-store sales increased 8.4% for the first nine months of fiscal 2004 with PacSun same-store sales up 8.8% and d.e.m.o. same-store sales up 4.7%.

                  PACIFIC SUNWEAR OF CALIFORNIA INC.
                     SUMMARY STATEMENTS OF INCOME
                              (unaudited)
           (in $ thousands, except share and per share data)

                         Third Quarter Ended      Nine Months Ended
                         OCT. 30,     NOV. 1,    OCT. 30,     NOV. 1,
                           2004        2003        2004        2003
Net sales                $329,083     281,253    $849,011    $713,976
Gross margin              118,880     100,617     297,272     244,305
Selling, G&A expenses      67,993      61,358     192,004     170,499
Operating income           50,887      39,259     105,268      73,806
Interest income, net          403         213       1,176         342
Income before taxes        51,290      39,472     106,444      74,148
Income tax expense         19,394      14,963      40,248      28,281
Net income                $31,896     $24,509     $66,196     $45,867
Net income per share,
 basic                      $0.43       $0.32       $0.87       $0.60
Net income per share,
 diluted                    $0.42       $0.31       $0.85       $0.59