Shares of teen apparel retailer Pacific Sunwear of California
The company, which operates the PacSun, PacSun Outlet, and d.e.m.o. store lines as well as a shopping website, said full-year revenue rose 23% to $1.05 billion on 86 new stores and an impressive same-store sales increase of 13.1%. Net income for the year improved more than 60% to $80.2 million. The figures look stunning next to recent numbers from such competitors as Gap
The Q4 numbers were slightly downbeat by comparison, though impressive nevertheless: Revenues rose 23%, but same-store sales jumped 12% for the quarter and net income was up 48%. This shouldn't really surprise investors too much anyway, since by including January in its Q4 -- not uncommon for retailers -- the company tacks on a relatively slow (and often markdown-intensive) month to the end of the holiday season.
And Pacific Sunwear doesn't have much to complain about with regard to this year's Q4 anyway: Gross, operating, and net margins all improved over last year on the back of strong same-store sales growth. For the year, meanwhile, sales grew more quickly than did inventory. Cash from operations came in well ahead of net income. And free cash flow, at $111 million, was more than three times last year's figure.
Management's outlook for this year is comparatively conservative given last year's performance and February same-store sales growth of more than 14%. Pacific Sunwear is directing investors toward same-store sales growth of just 5% and EPS growth of 20% from the full-year figures reported last night. But should the company continue find the sweet spot of a competitive apparel business, it can also continue to outpace the S&P 500 as it has by a considerable margin over the last 12 months.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story. He can be reached via email.