Soaring material costs, expenses and a struggling women’s business sank fourth quarter results well below expectations for Pacific Sunwear, Inc. as the surf-inspired retailer struggles to revive its image for a consumer that is gradually losing interest.


PacSun revenues fell 10.1% to $263.0 million for the fiscal fourth quarter ended Jan. 30 from $292.6 million in the prior-year period as a near-20% negative comp for women’s merchandise more than offset slight comp growth for the men’s category. Consolidated same-store sales fell 7% versus the year-ago period.


On a conference call with analysts, company CEO Gary Schoenfeld pointed out the management has changed 100% of PacSun’s field leadership teams and half of its district managers over the year and added that the retailer remains “deeply committed” to embracing a culture shift and attracting a new consumer.

 

Going into fiscal 2011, Schoenfeld emphasized the company’s commitment to bolstering its women’s business, noting that the Spring line has garnered “positive response” thus far. “Losing market share there to the likes of Target or H&M or Forever21 just was completely unacceptable to us,” said Schoenfeld, “and the response from consumers has been very encouraging on that front, off to quite a good start…our overall women's assortment in shorts and in dresses, in our [fashion] category has also been well received.”


Among other results, PacSun reported an adjusted loss of $22.0 million for the quarter. As reported, the company’s net loss was $35.2 million, or 53 cents per share, compared to a loss of $36.5 million, or 56 cents per share, in the prior-year period.


Gross margins declined 440 basis points to 18.2% of sales in fiscal q4. Merchandise margins declined 320 basis points.


Looking ahead, PacSun expects a non-GAAP net loss per share of between 46 cents and 55 cents for Q1 fiscal 2011, on an expected comp range of between negative 3% and positive 2%. Schoenfeld said PacSun expects to close between 30 and 50 stores during fiscal 2011.