PacSun to once again become leader for teens in mall

12 Mar '10

4 min read

• Gross margin rate, including buying, distribution and occupancy, of 19% to 21% versus last year's 27% due to a combination of merchandise margin declines and occupancy deleverage;
• SG&A dollars in the range of $71 million to $74 million versus last year's $77 million. This range includes estimated non-cash store asset impairment charges of approximately $3 million to $5 million compared to $2 million in last year's first quarter;
• As the Company will no longer be recording income tax benefits against its operating losses, tax expense will be approximately $500,000 due to taxable income projected to be generated in certain state and local tax jurisdictions.

Full Year Fiscal 2010

While it is difficult to predict full year results for fiscal 2010, the Company is currently planning for sequential improvement in its same-store sales results as the year progresses with the goal of getting back to positive same-store sales results by the fourth quarter. As a percentage of sales, gross margin, including buying, distribution and occupancy, is targeted to improve by approximately 50 to 100 basis points based upon anticipated improvements in merchandise margins which would offset further deleveraging of occupancy expenses. SG&A expenses are estimated to be in the range of $310 million to $320 million versus $340 million in fiscal 2009. Total capital expenditures for the year are expected to be in the range of $20 million to $30 million with depreciation and amortization expenses in the range of $55 million to $60 million.

Pacific Sunwear of California Inc

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