Pacific Sunwear’s Profit Jumps 63% on Sales Gain

Pacific Sunwear of California Inc. breezed past Wall Street’s expectations in its fourth quarter with a 63% jump in profit as teenage girl shoppers continued to drive sales for the surf and skate apparel retailer.

The Anaheim-based company, which also logged strong sales at its urban-influenced d.e.m.o. chain, said net income for the quarter ended Feb. 1 jumped to $23.2 million, or 46 cents a share, compared with $14.2 million, or 28 cents, the year before.

A consensus of analysts surveyed by Thomson First Call expected profit of 44 cents a share.

Sales jumped nearly 30% to $265.6 million, compared with $207.6 million in the year-earlier period.

Sales at stores open at least a year, an key industry indicator, rose 16%.

“It was a spectacular quarter ... particularly when you look at a lot of other companies in the teen space,” said Marcia Aaron, an analyst with Pacific Growth Equities.

In a strong kickoff to the current quarter, the retailer said sales increased nearly 25% in February, to $53.4 million. Comparable-store sales advanced almost 15% last month, including a 49% jump at d.e.m.o. stores, despite fierce winter storms that closed stores in some states.

The company has 794 PacSun and d.e.m.o. outlets.

Pacific Sunwear’s February performance is particularly impressive, Aaron said, because same-store sales in the overall specialty apparel sector are expected to dip 1.5% for the month.

“PacSun and d.e.m.o. are far outstripping the industry,” she said.

For that, the company can thank young female shoppers, who drop in to buy clothes and snap up shoes and accessories while they’re at it, Chief Executive Greg Weaver told analysts during a conference call.

Clothes for girls were expected to account for 50% of apparel sales at PacSun stores this year, up from 38% in 2001.

The average age of PacSun shoppers is 15.

Also fueling growth is the d.e.m.o. chain, which sells apparel inspired by hip-hop and rap music under such brands as Enyce, Phat Farm and J.Lo. The company said last week that it would add 10 d.e.m.o. stores this year as part of its expansion plans.

PacSun’s annual results also pushed past analyst expectations. Earnings rose a whopping 80% to $49.7 million, or 99 cents a share, compared with $27.6 million, or 56 cents, in fiscal 2001. Analysts expected profit of 97 cents a share.

Sales for the year increased 24% to $846.4 million, versus $684.8 million in the previous year. Comparable-store sales increased 10% for the year.

For the current quarter, the company said it was comfortable with Wall Street’s earnings expectations of 11 cents a share, which would be a 57% earnings growth over the previous year’s first quarter. For the year, the company said it expects earnings of $1.19, which would be 3 cents above analysts’ projections.

PacSun’s stock closed Monday at $17.77, up 6 cents, in Nasdaq trading. The earnings were released after the market closed.