Earnings Preview: Pacific Sunwear

Aug.20.08 | About: Pacific Sunwear (PSUN)

Pacific Sunwear of California (NASDAQ:PSUN) is expected to report Q2 earnings Thursday after the closing bell with a conference call scheduled for 4:30 pm ET.


Analysts are looking for a profit of 6c on revenue of $310.66M. The consensus range is 5c to 6c for EPS, and revenue of $297.77M to $331.02M, according to First Call. Pacific Sunwear recently reported its July same-store sales were down 4% vs. consensus of up 0.4% and said July sales were $99.1M. The company now expects to report Q2 EPS in line with expectations, at 5c to 6c.

Analyst Views

Commenting on the quarter, Zacks Research forecast a weak consumer into 2009 because macro headwinds -- housing, debt and food and energy prices -- will persist for some time, although the firm previously believed that teen apparel retailers like Pacific Sunwear would be able to work through these conditions because teens are not directly affected by falling house prices, tightening credit standards and higher energy prices. However, Zacks said recent sales trends would indicate otherwise and it appears that parents have cut back on the discretionary spending for their kids.

Piper Jaffray does not believe the teen retailers will be rewarded for overly bullish outlooks given macroeconomic uncertainty and continued traffic volatility. The firm said there is risk to models where second-half recoveries are assumed and/or guided. Analysts and investors will listen for comments from the company about back-to-school sales trends.