Pacific Sunwear Q2 Earnings Up 44%; Comps Rise 6.8%

Pacific Sunwear's net income for the second quarter
increased 44% to $19.3 million, or 25 cents per share, basic and diluted, compared to $13.4 million, or 18 cents per share, basic, and 17 cents per share, diluted, for the Q2, 2003. Total sales for the second quarter were $274.8 million, an increase of 17.2% over total sales of $234.4 million for the second quarter of fiscal 2003. Company same-store sales increased 6.8% in the second quarter of fiscal 2004 with PacSun same-store sales up 7.2% and d.e.m.o. same-store sales up 3.0%.

“I am pleased to report that we had a great second quarter with
earnings up 44 percent over last year,” stated Greg Weaver, chairman
and CEO. “Same-store sales increased 6.8 percent for the quarter which
helped to drive earnings. Operating margins grew very substantially in
the quarter to 11.2 percent of sales versus 9.2 percent last year. In
the first half, we opened 70 net new stores and are on plan to open a
total of 110 new stores for the year. We are pleased with our
back-to-school assortments and are optimistic as we enter the back
half of the year.

“Our same-store sales guidance for the third and fourth quarter is
for same-store sales growth of 5 percent in each quarter. We are
comfortable with the current consensus earnings per share estimates of
analysts for the third and fourth quarter of fiscal 2004 of $.39 and
$.52, respectively. This takes our full year fiscal 2004 earnings per
share guidance to $1.35.

“For 2005, we plan to open approximately 120 net new stores which
will include approximately 10 new PacSun Outlet stores, approximately
70 new PacSun stores and approximately 40 new d.e.m.o. stores. We also
plan to expand/relocate 30-35 of our most productive stores to larger
locations in 2005. This equates to square footage growth of
approximately 14 percent for fiscal 2005,” concluded Weaver.

Net income for the first half of fiscal 2004 was $34.3 million, or
$.44 per share, basic, and $.43 per share, diluted, an increase of 60
percent over net income of $21.4 million, or $.28 per share, basic and
diluted, for the first half of fiscal 2003. Total sales for the first
half (26 weeks) of fiscal 2004 were $519.9 million, an increase of
20.2 percent over total sales of $432.7 million for the first half (26
weeks) of fiscal 2003. Company same-store sales increased 9.5 percent
for the first half of fiscal 2004 with PacSun same-store sales up 10.1
percent and d.e.m.o. same-store sales up 4.6 percent.

                  PACIFIC SUNWEAR OF CALIFORNIA INC.

                      SUMMARY STATEMENT OF INCOME

                              (unaudited)

           (in $ thousands, except share and per share data)

                         Second Quarter Ended      First Half Ended

                         JULY 31,     AUG. 2,    JULY 31,     AUG. 2,

                           2004        2003        2004        2003

Net sales                $274,797    $234,392    $519,928    $432,723

Gross margin               94,820      79,834     178,391     143,689

Selling, G&A expenses      64,061      58,180     124,011     109,141

Operating income           30,759      21,654      54,380      34,548

Interest income, net          316          69         773         129

Income before taxes        31,075      21,723      55,153      34,677

Income tax expense         11,750       8,343      20,854      13,318

Net income                $19,325     $13,380     $34,299     $21,359

Net income per share,

 basic (a)                  $0.25       $0.18       $0.44       $0.28

Net income per share,

 diluted (a)                $0.25       $0.17       $0.43       $0.28

Weighted avg. shares

 outstanding, basic

 (a)                   76,322,161  75,885,641  77,239,966  75,205,094

Weighted avg. shares

 outstanding, diluted

 (a)                   77,911,595  78,104,037  79,035,717  77,331,519