You call this a turnaround, Pacific Sunwear
It obviously hasn't shown up yet, but will the next wave be the one that finally gets Pacific Sunwear riding high, or will it lead to another mouthful of sand and saltwater for the turbulent retailer? Ever the optimists, investors seem to think it's the former, pushing the stock price higher after seeing its latest results. They clearly weren't responding to PacSun's most recent showing, which left much room for improvement. Rather, they feel like there may finally be a bit of light just ahead.
In the first quarter, Pacific Sunwear lost $5.1 million, or $0.07 per share. Although sales jumped 6.9% to $320.6 million, comps fell 1.2% in the quarter thanks to a 16.5% crash in April. The retailer's inventory reductions continued into the quarter, decreasing 5.4%, but its cash seems to have gone out the door with it.
For the second quarter, the retailer stood firmly by its expectations of earnings of $0.18 to $0.20 per share, which would represent an increase of 29% to 43% over the second quarter of last year. Ah, so that's what everybody's getting so excited about. Yeah, I'm still not psyched yet.
Perhaps I'm being overly cautious, but I'd rather see a quarter or two of strong performances before diving in. With tough competition from fellow board retailer Zumiez
For more on the turnaround efforts at PacSun, check out:
Pacific Sunwear and American Eagle are Stock Advisor recommendations. You can get the Gardner brothers' most recent picks free with a 30-day trial. Zumiez is a Hidden Gems recommendation.