Pacific Sunwear of California, Inc. posted a 15% increase in net income for the fourth quarter to $47.0 million, compared to $40.7 million for the same period last year. Total sales for the fourth quarter ended January 28, 2006 were $424.9 million, an increase of 12% over total sales of $379.7 million last year. Earnings per diluted share increased 17% to 63 cents compared to 54 cents per diluted share for the fourth quarter of fiscal 2004. Same-store sales increased 2.2% for the comparable thirteen-week period ended January 28, 2006.
Net income for fiscal 2005 increased 18 percent to $126.2 million, compared to $106.9 million for fiscal 2004. Earnings per diluted share increased 21 percent to $1.67 compared to $1.38 per diluted share for fiscal 2004. Total sales for fiscal 2005 (fifty-two weeks) were $1.39 billion, an increase of 13 percent over total sales of $1.23 billion for fiscal 2004. Same-store sales increased 3.2 percent during fiscal 2005.
“I am pleased with our record fourth quarter and full year earnings performance,” commented Seth Johnson, Chief Executive Officer. “For the year we improved our operating margin to a record 14.2 percent and achieved 21 percent earnings per share growth over the prior year,” Johnson concluded.
Stock Repurchase Program
During the fourth quarter of fiscal 2005, the Company repurchased a total of 872,700 shares of its common stock at an average price of $25.10. These repurchases occurred under the $100.0 million share repurchase authorization approved by the Company's board of directors on May 12, 2005. During fiscal 2005, the Company repurchased 2,808,300 shares of its common stock at an average price of $23.37. At the end of the fourth quarter, $49.9 million remained available for future repurchases.
Fiscal 2006 Outlook
Based on February sales results, the Company is being cautious in its first quarter 2006 profit expectations. At this point the company is comfortable with earnings per share estimates in the range of $0.19 to $0.21 which includes $0.03 attributable to adjustments for stock option expenses as related to FAS 123R and pre-opening rent expenses as related to FASB Staff Position 13-1, Accounting for Rental Costs Incurred during a Construction Period. For year-over-year comparison purposes, this compares to first quarter 2005 non-GAAP earnings of $0.20 per diluted share, which includes the adjustments above. For the full fiscal year 2006, the Company is comfortable with net income growth estimates of 10 to 15 percent versus the prior year.
PACIFIC SUNWEAR OF CALIFORNIA, INC.
SUMMARY STATEMENTS OF INCOME
(unaudited, in thousands except share and per share data)
Fourth Quarter Ended Fiscal Year Ended
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JAN. 28, JAN. 29, JAN. 28, JAN. 29,
2006 2005 2006 2005
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Net sales $ 424,944 $ 379,675 $1,391,473 $1,229,762
Gross margin 154,346 142,556 506,491 447,934
Selling, G&A
expenses 80,599 77,781 309,218 277,921
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Operating income 73,747 64,775 197,273 170,013
Interest income, net 1,841 714 5,673 1,889
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Income before taxes 75,588 65,489 202,946 171,902
Income tax expense 28,579 24,761 76,734 64,998
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Net income $ 47,009 $ 40,728 $ 126,212 $ 106,904
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Net income per share,
basic $ 0.63 $ 0.55 $ 1.69 $ 1.41
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Net income per share,
diluted $ 0.63 $ 0.54 $ 1.67 $ 1.38
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Wtd avg shares
outstanding, basic 74,085,637 74,408,255 74,758,874 75,825,897
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Wtd avg shares
outstanding,
diluted 74,846,162 75,856,319 75,713,793 77,464,115
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