Marginal rise in Q3 FY14 sales at Pacific Sunwear

06 Dec '13

3 min read

Pacific Sunwear of California announced that net sales from continuing operations for the third quarter of fiscal 2013 ended November 2, 2013, were $206.6 million versus net sales from continuing operations of $215.5 million for the third quarter of fiscal 2012 ended October 27, 2012.

The 53rd week retail calendar shift resulted in a decrease in net sales of approximately $11 million for the third quarter of fiscal 2013, compared to the third quarter of fiscal 2012. Comparable store sales for the third quarter of fiscal 2013 increased 1%. The Company ended the third quarter of fiscal 2013 with 635 stores versus 722 stores a year ago.

On a GAAP basis, the Company reported income from continuing operations of $17.2 million, or $0.23 per diluted share, for the third quarter of fiscal 2013, compared to income from continuing operations of $3.4 million, or $0.05 per diluted share, for the third quarter of fiscal 2012.

Income from continuing operations for the Company's third quarter of fiscal 2013 included a non-cash gain of $23.4 million, or $0.31 per diluted share, compared to a non-cash gain of $5.6 million, or $0.08 per diluted share, for the third quarter of fiscal 2012 related to the derivative liability that resulted from the issuance of the Convertible Series B Preferred Stock (the "Series B Preferred") in connection with the term loan financing the Company completed in December 2011.

On a non-GAAP basis, excluding the non-cash gain on the derivative liability and store closure related charges, and using a normalized annual income tax rate of approximately 37%, the Company would have incurred a loss from continuing operations for the third quarter of fiscal 2013 of $3.6 million, or $(0.05) per diluted share, as compared to a loss from continuing operations of $1.4 million, or $(0.02) per diluted share, for the same period a year ago.

"The third quarter marks our seventh consecutive quarter of positive comparable store sales and had there not been the 53rd week calendar shift, our non-GAAP loss per diluted share would have been break-even compared to the $0.02 loss last year," said Gary H. Schoenfeld, President and Chief Executive Officer.

"As we transition into the peak holiday season, we have had a strong start in November with comparable store sales up 6% driven by a number of factors including: strength in our emerging brands and unique product assortment, colder weather, and strong Black Friday performance. Overall, we believe our results continue to validate the unique positioning we are establishing for PacSun as we strive to become the leading specialty retailer for great brands and on-trend fashion and fashion basics."

The Company's guidance range for the fourth quarter of fiscal 2013 contemplates a non-GAAP loss per diluted share from continuing operations of between negative $0.17 and negative $0.12 and includes the impact of the 53rd week retail calendar shift.

Pacific Sunwear

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