Pacific Sunwear Plunges on Flat Comps - Analyst Blog
January 10 2014 - 9:30AM
Zacks
Shares of Pacific Sunwear
of California Inc. (PSUN) witnessed a drastic fall of 14%
during the after-market trading session following the holiday sales
results and a disappointing outlook. The apparel retailer stated
that comparable-store sales for the fourth quarter of fiscal 2013
(the holiday period) remained flat, as the season appeared to be a
tough one. However, including online sales comps rose 1%.
Pacific Sunwear stated that it kick
started the holiday season on a strong note in November but lost
momentum during the first three weeks of December due to lower
traffic and sluggishness registered in denim. Again it picked pace
as Christmas approached.
Given the trend so far, management
is anticipating the loss to aggravate in the fourth quarter and
projected loss of 18 cents to 21 cents a share for the fourth
quarter based on revenue forecast of $211 million to $214 million.
Earlier, this Zacks Rank #3 (Hold) stock had envisioned loss in the
band of 12 cents to 17 cents a share and revenue between $216
million and $225 million.
The Zacks Consensus Estimate for
the fourth quarter is a loss of 14 cents, and we could witness a
downward revision in the estimate, following the company’s revised
outlook.
Pacific Sunwear is not the only
company to have cut its forecast due to lower-than-expected sales
and margin pressure following intense price competition that
resulted in huge discounts. Retailers that lowered their guidance
battered by the holiday results include Family Dollar
Stores Inc. (FDO), American Eagle Outfitters
Inc. (AEO) and L Brands Inc. (LB).
Family Dollar, the self-service
retail discount store chain, now projects fiscal-2014 earnings
between $3.25 and $3.55 per share, down from $3.80 to $4.15
forecasted earlier. L Brands, the specialty retailer of women’s
intimate and other apparel, now anticipates fourth-quarter fiscal
2013 earnings to be approximately $1.60 per share compared to its
earlier forecast of $1.67 to $1.82.
American Eagle, apparel and
accessories retailer, now expects its fourth-quarter fiscal 2013
earnings to dovetail with the lower-end of previously provided
guidance range of 26 cents to 30 cents a share.
Consumer spending environment was
not very convincing, and bargain hunters went from one shop to
another to grab the best deal.
AMER EAGLE OUTF (AEO): Free Stock Analysis Report
FAMILY DOLLAR (FDO): Free Stock Analysis Report
L BRANDS INC (LB): Free Stock Analysis Report
PAC SUNWEAR CAL (PSUN): Free Stock Analysis Report
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