Pacific Sunwear Q2 comparable sales down 6 percent
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On a GAAP basis, the company reported net income of 8.3 million dollars, or 0.12 dollar per diluted share, compared to net income of 7.5 million dollars, or 0.10 dollar per diluted share for the second quarter of fiscal 2014. On a non-GAAP basis, excluding the non-cash gain on the derivative liability and assuming a tax benefit of approximately 3.3 million dollars, the company would have incurred a net loss of 4.4 million dollars, or 0.06 dollar per diluted share.
Undertakes restructuring exercise for growth
“Key seasonal categories including shorts, swim and sandals were down in both genders and were the primary causes of disappointing results in the second quarter,” said Gary H. Schoenfeld, President and CEO, adding, “Shifting trends in consumer spending and shopping patterns necessitate that we further reduce operating expenses. Approximately one-half of the savings would come through more streamlined execution in our stores, and the other half through the restructuring of operations at our corporate headquarters and the reconfiguration of certain positions and departments.”
In connection with its expense reduction initiative, the company announced the promotion of Chris Tedford to Vice President and interim Chief Financial Officer and Ernie Sibal to Vice President of Real Estate, Construction and Strategy. Tedford has been with PacSun since 2011 as the company's Senior Director and Controller, having previously been Controller at Clean Energy Fuels Corp and Multi-Fineline Electronix, both public companies, as well as a Senior Manager at Deloitte & Touche LLP.
Sibal has been with PacSun since 2008 as the company's Senior Director of Real Estate, Construction and Strategy, and has been instrumental in the restructuring and management of its real estate portfolio. As a result of these promotions, Michael Kaplan has departed as the company's Senior Vice President and Chief Financial Officer.
Weak third quarter outlook
The Company's guidance range for the third quarter of fiscal 2015 contemplates a non-GAAP net loss per diluted share of between 0.13 dollar and 0.05 dollar, compared to 0.03 dollar in the third quarter of fiscal 2014. Comparable store sales are expected to be below 6 percent to 3 percent and net sales between 196 million dollars to 203 million dollars.