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PacSun confirms 21% rise in Q2 net income
12 Aug '05
6 min read
Net income for the first half of fiscal 2005 increased 19 percent to $38.7 million, compared to $32.4 million for the first half of fiscal 2004. Earnings per diluted share increased 24 percent to $0.51 compared to $0.41 per diluted share for the first half of fiscal 2004.
Total sales for the first half (twenty-six weeks) of fiscal 2005 were $589.0 million, an increase of 14 percent over total sales of $517.7 million for the first half (twenty-six weeks) of fiscal 2004. Same-store sales increased 3.1 percent for the comparable twenty-six week period ended July 30, 2005.
Corrections to PacBucks Accounting
Customers earn PacBucks by purchasing a specified dollar amount of merchandise during an issuance period. PacBucks can then be redeemed as a discount on a future sales transaction during a specified period (typically within two to four weeks), in conjunction with the purchase of an additional specified amount of merchandise.
The Company has historically issued PacBucks at three separate times during the year (spring, back-to-school, and holiday). The issuance and redemption periods relating to PacBucks are typically contained within a given quarterly reporting period. As a result, the Company has historically recorded the full impact of actual PacBuck redemptions as a reduction to net sales in the quarter redeemed.
The Company has determined that this accounting is correct for two of the three issuance periods. However, for the back to school quarter, PacBucks issued in the month of July (second quarter) are redeemed in August (third quarter). This results in a reduction in sales and net income for the second quarter of 2004 with a corresponding increase in net sales and income for the third quarter of 2004. There will be no impact on annual earnings in fiscal 2004.
Total sales for the first half (twenty-six weeks) of fiscal 2005 were $589.0 million, an increase of 14 percent over total sales of $517.7 million for the first half (twenty-six weeks) of fiscal 2004. Same-store sales increased 3.1 percent for the comparable twenty-six week period ended July 30, 2005.
Corrections to PacBucks Accounting
Customers earn PacBucks by purchasing a specified dollar amount of merchandise during an issuance period. PacBucks can then be redeemed as a discount on a future sales transaction during a specified period (typically within two to four weeks), in conjunction with the purchase of an additional specified amount of merchandise.
The Company has historically issued PacBucks at three separate times during the year (spring, back-to-school, and holiday). The issuance and redemption periods relating to PacBucks are typically contained within a given quarterly reporting period. As a result, the Company has historically recorded the full impact of actual PacBuck redemptions as a reduction to net sales in the quarter redeemed.
The Company has determined that this accounting is correct for two of the three issuance periods. However, for the back to school quarter, PacBucks issued in the month of July (second quarter) are redeemed in August (third quarter). This results in a reduction in sales and net income for the second quarter of 2004 with a corresponding increase in net sales and income for the third quarter of 2004. There will be no impact on annual earnings in fiscal 2004.
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