Pacific Sunwear Q1 Growth Stymied by Weather, Shift in Trends…

Pacific Sunwear saw some key categories at its PacSun stores go negative or slow down in April, impacting same-store and total sales for the first quarter, while the company continues to chase the trends at both of its nameplates as fashion trends shift and weather holds back sales of summer goods and sandals.

After a 10.5% comp store sales gain in February, management said the combined March/April period was flat.

At PacSun, the retailer’s skate/surf lifestyle format for teens, they saw much of the slow down coming from the swim and shorts categories, which they said were core strengths for the business. In girl’s, swim and shorts were both up in the 20’s in February, but were flat to negative in April. The guy’s picture was much the same, with the combined comp for the two categories posting an increase in the mid- to high-teens in February before turning negative in April. The two categories account for roughly 25% to 30% of the apparel business in April, so the decline had a significant impact on results.

While weather may have played a part, management also acknowledged that the girl’s short business could have benefited from additional longer short styles and declines could have been offset by more capris in the mix. The guy’s polo business comped “very well” during the quarter, but again management said they could have benefited from some newness to the assortment in April. They were apparently over-assorted in short sleeve wovens, which were “very disappointing.” Girls’ polos also comped well in February, but a lack of any new flow of goods after the initial shot hurt sales later in the quarter.

The PacSun footwear business posted double-digit comps for the quarter, but a “very tough” sandal business may have led to a deceleration of the gains here as the quarter progressed. The guy’s sneaker business was strong throughout the quarter as the debut of the Circa brand in the stores fueled more business. The girl’s sneaker business “dropped significantly” during the quarter, a trend that management said was due to a lack of sneaker styles and too many sandals.

The d.e.m.o. business continues to be driven by the women’s business, which posted comps in the high-teens thanks to strong performances from Baby Phat and Apple Bottoms. The guy’s business here continues to suffer, posting declines in the high-singles for the period, as stronger polo sales failed to offset rapid declines in the active categories. Management said they would have benefited from more long sleeve wovens versus short sleeves. The business at d.e.m.o. is now about 53/47 men’s to women’s, a big shift from the 60/40 mix last year.

>>> Sounds like someone better get ahead of the merchandising curve here…