Investors Push Pacific Sunwear Down 27%

Fears on Wall Street that Americans are spending less at the mall led investors Friday to hammer shares of Pacific Sunwear of California, sending the Anaheim retailer’s stock price down 27% to its lowest level in 17 months.

Analysts said investors suspect that Pacific Sunwear, which specializes in hip surf wear for teenagers, remains is in the throes of a slowdown in spring sales.

Shares in Pacific Sunwear plunged $5.69 a share Friday, closing at $15.56 in Nasdaq trading.

Earlier this month, the company warned Wall Street that April sales of its T-shirts, board shorts and other apparel would be less then expected. Investors now fear the trend may have continued into May.

Although the company has not released any information about May sales, several other retailers have recently announced that cooler weather has resulted in lower sales or earnings. Among those experiencing a slowdown are Gap Inc., American Eagle Outfitters and Wet Seal Inc.

Moreover, “there’s a general fear about consumer spending over the next few months,” said James Ragan, analyst at Crowell, Weedon & Co. in Los Angeles. “That’s taking the momentum investors out of retailing stocks.”

Company officials did not return phone calls Friday.

Investors also may have been reacting to the cancellation of a Pacific Sunwear marketing trip to Denver earlier this week, which some think might be a sign that sales are down.

Pacific Sunwear is scheduled to release its May sales data next week. Analysts are expecting a 4% rise in same-store sales.

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Not So Sunny

Pacific Sunwear’s stock price dropped $5.88 on Friday, more than a 27% drop.

Closing price: $15.56

Source: Bloomberg News