You don't expect the market to like dour earnings news, but Wall Street is putting on its best Rip Van Winkle act and is acting astonished -- shocked!, I tell you -- that Pacific Sunwear
The teen retailer recorded a loss of $0.10 per share (excluding one-time items) on revenue of $266.9 million for the first quarter. Had this news and the market's reaction occurred in a vacuum, it would be understandable. Considering that analysts have been expecting a worsening outlook and PacSun itself announced anticipated results when it updated same-store sales numbers, it's beginning to look like the Street is overreacting.
The quarter marked the start of PacSun's shortened version of a 12-step program. It ended its misguided attempts at urban wear and shoes: It's selling off and consolidating its distribution centers; and the surf, skate, and snowboard retailer is getting rid of footwear from its namesake stores. In short, PacSun is focusing on what it does best -- selling clothes to teens.
Compared with Aeropostale
Of course, it's navigating in difficult markets. With exposure to California, Florida, Nevada, and Arizona -- which have been hit hard by the housing crisis -- it's going to have weaker results.
PacSun is not alone in its weakened state, with both Gap
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