PacSun Q4 Income Climbs 19% with 5.1% Comp Sales increase

Pacific Sunwear of California net income for the fourth quarter increased 19% to $40.9 million compared to $34.5 million for the fourth quarter of fiscal 2003. Net income per share increased 26% to 54 cents per diluted share compared to 43 cents per diluted share for the fourth quarter of fiscal 2003. Total sales for the fourth quarter of fiscal 2004 were $379.7 million, an increase of 16.2% over total sales of $326.8 million for the fourth quarter of fiscal 2003. Company same-store sales increased 5.1% for the fourth quarter of fiscal 2004 with PacSun same-store sales up 4.8% and d.e.m.o. same-store sales up 7.5%.

Net income for fiscal 2004 increased 33% to $105.9 million, or $1.37 per diluted share, compared to $79.9 million, or $1.01 per diluted share for fiscal 2003. Total sales for fiscal 2004 (52 weeks) were $1,229.8 million, an increase of 18.1% over total sales of $1,041.5 million for fiscal 2003 (52 weeks). Company same-store sales increased 7.3% for fiscal 2004 with PacSun same-store sales up 7.5% and d.e.m.o. same-store sales up 5.7%.

As previously announced in the Company’s Current Report on Form 8-K issued Feb. 25, 2005, the Company has corrected its accounting for certain lease matters. The net income and earnings per share amounts noted above for the fourth quarters and fiscal years ended Jan. 29, 2005, and Jan. 31, 2004, respectively, have been restated to reflect the impact of those corrections.

“I am pleased to report record earnings for PacSun for the fourth quarter and full year,” stated Greg Weaver, chairman and CEO. “In addition, the Company achieved record operating income levels of 17.1% and 13.7% for the fourth quarter and full year, respectively. Sales per square foot improved to $374 from $363 for the prior year. For fiscal 2005, we plan to open 120 net new stores and expand or relocate approximately 35 stores with square footage growing approximately 15%. The 120 net new stores include 70 PacSun stores, 10 PacSun Outlet stores, and 40 d.e.m.o. stores. This will take the year-end 2005 store count to 1,100,” concluded Weaver.

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

                        Fourth Quarter Ended     Fiscal Year Ended
                         JAN. 29,   JAN. 31,    JAN. 29,    JAN. 31,
                           2005       2004        2005        2004
Net sales                $379,674    $326,784  $1,229,762  $1,041,456
Gross margin              142,293     121,112     444,422     370,523
Selling, G&A expenses      77,259      66,497     276,036     242,837
Operating income           65,034      54,615     168,386     127,686
Interest income, net          714         391       1,889         732
Income before taxes        65,748      55,006     170,275     128,418
Income tax expense         24,859      20,552      64,383      48,555
Net income                $40,889     $34,454    $105,892     $79,863

Net income per share,
 basic                      $0.55       $0.44       $1.40       $1.04
Net income per share,
 diluted                    $0.54       $0.43       $1.37       $1.01
Weighted avg. shares
 outstanding, basic    74,408,255  78,287,219  75,825,897  76,595,758
Weighted avg. shares
 outstanding, diluted  75,856,319  80,226,072  77,464,115  78,849,651