Pacific Sunwear of California Inc. reported it grew same-store sales 9 percent in December and gross margins between 400 and 500 basis points in the fourth quarter compared with a year earlier even as other mall-based, teen retailers said the highly promotional environment squeezed their top and bottom lines.
“We have had an excellent Holiday season with strong sales performance in both men's and women's and an estimated 400-500 basis point improvement in gross margins,” said President and CEO Gary H. Schoenfeld. “With what will be our 12th consecutive quarter of positive comparable store net sales, customers are embracing the new PacSun and our elevated brands and merchandising assortments.”
Key to the retailer's turnaround has been securing exclusive rights to sell certain SKUs at the mall. In 2014, that included the Nike SB Stefan Janoski Max skate shoe, Vans' California collection, Been Trill apparel and some Adidas Originals styles as well as a host of California-inspired brands. In 2015, PSUN will roll out more shop-in-shops with the street wear brand Reed Space. The retailer has also become adept at reacting quickly to trends, such as joggers, slit-knee denim and deconstructed jeans.
“In 2014 certainly the jogger trend, capturing this casual active lifestyle became really important and I think we have capitalized on that very, very effectively,” said Schoenfeld.
PSUN updated its fourth quarter forecast, which now calls for same-store net sales to grow approximately 6 percent and a non-GAAP loss from continuing operations in the range of 12-to-11 cents per diluted share, compared to its previous guidance that called for negative 17-to-12 cents. The company reported a non-GAAP loss from continuing operations per diluted share of17 cent for the fourth quarter of fiscal 2013.
As of Jan. 8, PacSun operates 617 stores in all 50 states and Puerto Rico, down from 819 in December, 2011.
