Pacific Sunwear of California, Inc. announced net sales from continuing operations for the fourth quarter ended Feb. 1 reached $218.6 million, down 1.9 percent from a year earlier, but up $5 million when adjusting for an additional 53rd week in 2012 that brought in $9 million.
Comparable store sales increased 2 percent for the eight consecutive quarter.
Average unit sales for the quarter were flat while total transactions were up 3 percent. E-commerce sales increased 8 percent in the fourth quarter. Gross margin was approximately 20 percent, down 100 basis points (bps) compared from the fourth quarter of 2012, but up 50 bps after adjusting for the 53rd week in 2012. SGA expenses were 27 percent of net sales, down 100 bps, or down 130 bps after adjusting for the 53rd week in 2012.
Sales of Women’s tops were very strong, while sales of Women’s denim were down significantly, according to PSUN President and CEO Gary H. Schoenfeld. Women’s accessories and footwear sales also comped negatively, particularly in boots and slippers. Men’s footwear remained strong thanks to Nike and Vans and Schoenfeld said he is very excited about adding Adidas to the mix this spring.
On a GAAP basis, the company reported a loss from continuing operations of $22.0 million, or 32 cents a share, which was essentially flat with the fourth quarter of 2012. The company's operating loss came in at $14.6 million, compared to $15.0 million for the same period a year ago. PSUN pegged its non-GAAP loss from continuing operations at $11.8 million, or 17 cents per diluted share, again nearly flat with the prior year’s loss of $11.6 million, or 17 cents per diluted share. Adjusting for the 53rd week retail calendar shift, the company would have incurred a non-GAAP loss from continuing operations of 15 cents in the more recent quarter.
PSUN ended the quarter with 618 stores versus 644 stores a year earlier and inventory down 6 percent on a comparable store basis.
While saying he was encouraged by the eighth straight quarter of positive comparable store sales, sustained gross
margins, and reduced operating costs, Schoenfeld declined to speculate on when PSUN would return to profitability.
The company's guidance range for the first quarter of fiscal 2014 contemplates a non-GAAP loss per diluted share from continuing operations of between 17 and 12 cents, compared to a loss of 14 cents in the first quarter of fiscal 2013. The guidance excludes the impact from the changing value of derivates and assumes comparable store sales from 1 percent to 4 percent; revenue from $169 million to $174 million; and a gross margin rate, including buying, distribution and occupancy, of 25 percent to 27 percent. The company expects to close 10 to 20 more stores in 2014 as leases expire.
