Pacific Sunwear Plunges on Flat Comps - Analyst Blog


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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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: AEO , FDO , LB , PSUN

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