Pacific Sunwear 2002 Profits Surge 80% on 24% Sales Jump

Pacific Sunwear of California Inc. reported net income for the fourth quarter increased 63% to $23.2 million, or $0.47 per share, basic, and $0.46 per share, diluted, compared with $14.2 million, or $0.29 per share, basic, and $0.28 per share, diluted, for the fourth quarter of fiscal 2001.

Total sales for the fourth quarter (13 weeks) ended Feb. 1, 2003 were $265.6 million, an increase of 27.9% over total sales of $207.6 million for the fourth quarter (13 weeks) ended Feb. 3, 2002. Same-store sales increased 15.6% for the comparable 13-week period ended Feb. 1, 2003.

“I am very pleased with our fourth quarter performance with earnings up 63% and same store sales up 15.6%,” stated Greg Weaver, chairman and CEO. “At PacSun, we are gaining market share with the help of multiple brands and a growing girls business. At d.e.m.o., we have substantially improved our overall merchandising in addition to growing our girls and accessory businesses.

“Our goal of improving our financial performance and operating margins is very much on track. For fiscal 2002, we achieved an 80% increase in net earnings with operating income of $81.2 million, or 9.6% of sales. Our goal would be to improve operating margins to 12% for fiscal 2004 with square footage growth of at least 12% in fiscal 2003 and at least 10% in fiscal 2004,” concluded Weaver.

Total sales for fiscal 2002 (52 weeks) were $846.4 million, an increase of 23.6% over sales of $684.8 million for fiscal 2001 (52 weeks). Same-store sales increased 9.7% for the comparable 52 week period ended Feb. 1, 2003. Net income for fiscal 2002 increased 80% to $49.7 million, or $1.01 per share, basic, and $0.99 per share, diluted, compared with $27.6 million, or $0.56 per share, basic and diluted, for fiscal 2001.

                  PACIFIC SUNWEAR OF CALIFORNIA INC.
                      SUMMARY STATEMENT OF INCOME
                              (unaudited)
             (in $000's, except share and per share data)


                          FOURTH QUARTER ENDED    TWELVE MONTHS ENDED

                           FEB. 1,     FEB. 2,    FEB. 1,      FEB. 2,
                             2003        2002       2003         2002

Net Sales                 265,590     207,605     846,393     684,840
Gross margin               94,997      69,259     283,683     220,180
Selling, G&A expense       57,320      46,394     202,445     175,898

Operating income           37,677      22,865      81,238      44,282
Interest
 expense/(income)               1        (119)        594        (470)

Income before taxes        37,676      22,984      80,644      44,752
Income tax expense         14,467       8,827      30,967      17,186

Net income                 23,209      14,157      49,677      27,566