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GAAP net loss recovers 66.3% at Pacific Sunwear in Q1FY16
02
Jun '15
GAAP net loss at apparel retailer and NASDAQ listed Pacific Sunwear of California, Inc. recovered 66.34 per cent year on year for the first fiscal quarter ended May 2, 2015.

On a GAAP basis, Pacific Sunwear reported a net loss of $3.5 million or $0.05 loss per diluted per share, as compared to a net loss of $10.4 million, or $0.15 loss per diluted share for the first quarter of fiscal 2015.

The net loss in first quarter of fiscal 2016 includes a non-cash gain of $9.1 million or $0.13 per diluted share as against a non-cash gain of $1.2 million or $0.02 per diluted share in the same quarter of last fiscal.

“This is related to the derivative liability that resulted from the issuance of the Convertible Series B Preferred Stock in connection with the term loan financing the Company completed in December 2011,” the retailer explained.

Net sales were down at $166.5 million in the reporting quarter versus net sales of $171.1 million in the first quarter of previous fiscal, while comparable store sales too fell 2 per cent.

On a non-GAAP basis, excluding the non-cash gain on the derivative liability and assuming a tax benefit of approximately $3.0 million, it would have incurred a net loss for the first quarter of fiscal 2016 of $8.6 million.

This compares to a net loss of $7.4 million, or $0.11 loss per diluted share, for the same period a fiscal earlier.

"Continued increases in merchandise margins offset our first quarterly negative sales comp in more than three years," said CEO Gary Schoenfeld.

"Some key categories including shorts and non-apparel have underperformed, which is also reflected in our near-term outlook for the second quarter,” he added.

“We believe the strength of several key brand initiatives, coupled with anticipated growth in long bottoms will get us back to positive comp store sales along with further increases in margins," he noted.

The Company ended the first quarter of fiscal 2016 with 605 stores versus 618 stores a year ago.

The Company's guidance range for the second quarter of fiscal 2016 contemplates a non-GAAP loss per diluted share of between $0.05 and $0.01, compared to $0.03 in the second quarter of fiscal 2015.

The forecasted second quarter non-GAAP loss per diluted share guidance range is based on that comparable store sales will remain between a negative 4 per cent and flat.

It also assumes that net sales will range between $201 million to $209 million and gross margin rate, including buying, distribution and occupancy will be between 27 to 29 per cent.

The retailer also forecast that SG&A expenses will be in the range of $54 million to $56 million and applicable non-GAAP adjustments are tax effected using a normalised annual income tax rate. (AR)

Fibre2fashion News Desk - India

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