On Aug. 10, Pacific Sunwear (NASDAQ:PSUN) released Q2 2006 earnings for the period ended July 29.

  • Sales rose only 1.5% on a 5.5% decline in same-store sales.
  • Margins fell off the lip, as measured in full percentage points. Ouch!
  • Net profit dropped 54%, while EPS dropped by half. The magnitude of the underperformance was mitigated by a smaller number of fully diluted shares.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2006

Q2 2005

Change

Sales

$321,650

$313,682

$309,064

1.5%

Net Profit

--

$9,710

$21,112

(54%)

EPS

$0.15

$0.14

$0.28

(50%)

Diluted Shares

--

71,867

76,119

(5.6%)



Get back to basics with a look at the income statement.

Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin

31.06%

35.71%

(4.65)

Operating Margin

4.64%

10.60%

(5.96)

Net Margin

3.1%

6.83%

(3.73)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash + ST Invest.

$11,783

$162,593

(92.8%)

Other Current Assets

$43,870

$37,146

18.1%

Inventory

$286,666

$242,631

18.1%



Liabilities

Q2 2006

Q2 2005

Change

Accounts Payable

$81,683

$106,695

(23.4%)

Long-Term Debt

No Data

$0

N/A



Learn the ways of the balance sheet.

Cash Flow Highlights

Q2 2006

Q2 2005

Change

Cash From Ops.

($1,455)

$77,342

N/A

Capital Expenditures

$62,675

$48,173

30.1%

Free Cash Flow

($64,130)

$29,169

N/A



Find out why Fools always follow the money.

Related companies:

  • Abercrombie & Fitch (NYSE:ANF)
  • Volcom (NASDAQ:VLCM)
  • American Eagle Outfitters (NASDAQ:AEOS)
  • Zumiez (NASDAQ:ZUMZ)
  • Gap (NYSE:GPS)
  • Hot Topic (NASDAQ:HOTT)

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so checkFool.com for more of our in-depth discussion of what the numbers mean.

Pacific Sunwear, Gap, and American Eagle Outfitters areMotley Fool Stock Advisorrecommendations. Gap is anInside Valuerecommendation, and Volcom and Zumiez areHidden Gemspicks. You can try any of our market-beating newsletter servicesfor free.

At the time of publication,Seth Jaysonhad shares of American Eagle, but no positions in any other company mentioned. Fool rules arehere.