Pacific Sunwear of California, Inc. reported that total sales for the second quarter of fiscal 2008 ended August 2 were $312.7 million, an increase over sales totals of $311.8 million for the same period last year. Total company same-store sales, however, decreased one percent during the second quarter of fiscal 2008.


The company recorded income from continuing operations of $3.7 million, or 6 cents per diluted share for the second quarter as compared to $9.3 million, or 13 cents  per diluted share, for the year-ago period.


“Although our earnings for the second quarter were in line with our expectations, our results continue to reflect the impact of a weakening economy on the retail sector.” said Sally Frame Kasaks, Chief Executive Officer. “With the possibility of an even tougher environment ahead, we plan to maintain strong operating discipline while weathering these economic headwinds in order to position our business for success when the environment improves,

 

Outlook

The company is revising its outlook for the backend of fiscal 2008, citing a difficult economic environment and challenging retail conditions in some of its key markets.  The company expects earnings from continuing operations of 0 to 5 cents per diluted share for the third quarter of 2008 and non-GAAP earnings from continuing operations of 11 cents to 16 cents per diluted share for the fourth quarter of fiscal 2008.

 
PACIFIC SUNWEAR OF CALIFORNIA, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

      (unaudited, in thousands except share and per share data)


                           Second Quarter Ended     First Half Ended

                           ——————— ———————

                             AUG. 2,    AUG. 4,    AUG. 2,    AUG. 4,

                              2008       2007       2008       2007

                           ———- ———- ———- ———-

 Net sales                   $312,726   $311,775   $579,592   $579,881

 Gross margin                  95,258    101,846    170,723    177,044

 Selling, G&A expenses         90,173     86,933    185,985    163,638

                           ———- ———- ———- ———-

 Operating income (loss)

  from continuing

  operations                    5,085     14,913    (15,262)    13,406

 Interest income, net              11        541        769      1,510

                           ———- ———- ———- ———-

 Income (loss) from

  continuing operations

  before income taxes           5,096     15,454    (14,493)    14,916

 Income tax expense

  (benefit)                     1,388      6,196     (6,232)     5,996

                           ———- ———- ———- ———-

 Income (loss) from

  continuing operations         3,708      9,258     (8,261)     8,920

 Loss from discontinued

  operations, net of tax

  benefit                        (912)   (19,760)   (26,045)   (24,480)

                           ———- ———- ———- ———-

 Net income (loss)             $2,796   $(10,502)  $(34,306)  $(15,560)

                           ========== ========== ========== ==========


 Income (loss) from

  continuing operations per

  share, basic                  $0.06      $0.13     $(0.12)     $0.13

                           ========== ========== ========== ==========

 Income (loss) from

  continuing operations per

  share, diluted                $0.06      $0.13     $(0.12)     $0.13

                           ========== ========== ========== ==========


 Net income (loss) per

  share, basic                  $0.04     $(0.15)    $(0.50)    $(0.22)

                           ========== ========== ========== ==========

 Net income (loss) per

  share, diluted                $0.04     $(0.15)    $(0.50)    $(0.22)

                           ========== ========== ========== ==========


 Weighted average shares

  outstanding, basic       66,664,245 69,692,827 68,290,024 69,635,543

                           ========== ========== ========== ==========

 Weighted average shares

  outstanding, diluted     66,704,159 70,064,804 68,290,024 69,986,773

                           ========== ========== ========== ==========