Pacific Sunwear Q2 Net Income Jumps 84%; Sales Up 23%

Pacific Sunwear of California Inc. saw net income for the second quarter of fiscal 2003 increase 84% to $13.4 million, or $.26 per share, basic and diluted, over net income of $7.3 million, or $.15 per share, basic and diluted, for the second quarter of fiscal 2002.

Sales for the second quarter of fiscal 2003 were $234.4 million, an increase of 22.8% over sales of $190.9 million for the second quarter of fiscal 2002. Company same-store sales increased 13.9% for the second quarter of fiscal 2003 with PacSun same-store sales up 13.2% and d.e.m.o. same-store sales up 21.9%.

“I'm very pleased with our second quarter performance,” stated Greg Weaver, Chairman and CEO. “Operating margins were significantly improved, driven by strong same store sales increases at both PacSun and d.e.m.o. We are pleased with our merchandise assortment and encouraged about early back to school results. Longer term, we believe we are on track to achieve our operating margin goal of 12% for fiscal 2004,” concluded Weaver.

Net income for the first half of fiscal 2003 was $21.4 million, or $.43 per share, basic, and $.41 per share, diluted, an increase of 102% over net income of $10.6 million, or $.21 per share, basic and diluted, for the first half of fiscal 2002. Sales for the first half of fiscal 2003 were $432.7 million, an increase of 22.7% over sales of $352.6 million for the first half of fiscal 2002. Company same-store sales increased 13.6% for the first half of fiscal 2003 with PacSun same-store sales up 11.9% and d.e.m.o. same-store sales up 29.1%.

On Aug. 7, 2003 the company announced a three-for-two stock split. The record date for the split is Aug. 25, 2003. Shareholders of record as of that date will receive one new share of common stock for every two shares they owned on the record date. The additional shares will be mailed on or about Sept. 5, 2003.

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

                          SECOND QUARTER ENDED      FIRST HALF ENDED
                          AUG. 2,     AUG. 3,     AUG. 2,     AUG. 3, 
                           2003        2002        2003        2002
Net sales                $234,392    $190,854    $432,723    $352,564
Gross margin               79,834      60,605     143,689     109,772
Selling, G&A expense       58,180      48,454     109,141      92,168

Operating income           21,654      12,151      34,548      17,604
Interest income
 (expense)                     69        (306)        129        (453)

Income before taxes        21,723      11,845      34,677      17,151
Income tax expense          8,343       4,549      13,318       6,586

Net income                $13,380      $7,296     $21,359     $10,565
Net income per share,
 basic(a)                   $0.26       $0.15       $0.43       $0.21
Net income per share,
 diluted(a)                 $0.26       $0.15       $0.41       $0.21