Pacific Sunwear of California, Inc. announced that net sales for the first quarter of fiscal 2011 ended April 30, 2011 were $186 million, a decrease of 2 percent from net sales of $190 million for the first quarter of fiscal 2010 ended May 1, 2010. Total Company same-store sales increased 1 percent during the first quarter of fiscal 2011.


The company reported a net loss of $31 million, or 48 cents per share, for the first quarter of fiscal 2011 compared to a net loss of $31 million, or 47 cents per share, for the first quarter of fiscal 2010. Results for the first quarter of fiscal 2011 reflect the continuing impact of a valuation allowance against the company’s deferred tax assets. On a comparable non-GAAP basis, using a normalized 36.5 percent income tax rate, the Company’s non-GAAP net loss for the quarter was $20 million, or 30 cents per share.


“Getting back to a positive comp is certainly an important step in the turnaround of our business,” said Gary H. Schoenfeld, President and Chief Executive Officer. “As our new team comes together, we have initiated a number of important changes in merchandising, marketing and in-store experience that customers are beginning to respond to.”


Financial Outlook for Second Fiscal Quarter of 2011


The company’s guidance range for the second quarter of fiscal 2011 contemplates a GAAP net loss per share of 36 cents to 46 cents which reflects the continuing impact of maintaining a valuation allowance against deferred tax assets and a low effective tax rate. On a non-GAAP basis, using a normalized effective income tax rate of 36 percent to 37 percent, the Company’s guidance range translates to a net loss of 22 cents to 29 cents per share for the second quarter of fiscal 2011. The forecasted second quarter GAAP guidance range is based on the following major assumptions:


•Same-store sales of -3 percent to +2 percent;
•Gross margin rate, including buying, distribution and occupancy, of 19 percent to 21 percent;
•SG&A expenses in the range of $67 million to $69 million; and
•Minimal income tax expense as the Company no longer records income tax benefits against its operating losses.


 












































































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




FIRST QUARTER ENDED

4/30/11 5/01/10
Net sales $185,754 $190,308
Gross margin 35,490 42,466
SG&A expenses 66,142 73,154
Operating loss (30,652) (30,688)
Other expense, net 542 2
Loss before income taxes (31,194) (30,690)
Income tax expense 276 338
Net loss $(31,470) $(31,028)



Net loss per share:

Basic and Diluted $(0.48) $(0.47)



Weighted average shares outstanding:

Basic and Diluted 66,202,568 65,837,928