Pacific Sunwear: Finding Sunshine Amidst Teen Retail Gloom
Helix Investment Research
Helix Investment Research
Pacific Sun: Billabong Redux?
Pacific Sunwear Of California: Overvalued And Undercapitalized
Pacific Sunwear Of California: Overvalued And Undercapitalized
Sat, May 14, 11:01 AM
- The retail sector stays in focus next week with Target (NYSE:TGT), Wal-Mart (NYSE:WMT), TJX Companies (NYSE:TJX), and Ross Stores (NASDAQ:ROST) all due to report on Q1 earnings to follow on a week of dismal reports and guidance from the department store sector (Nordstrom, L Brands, Macy's, Kohl's). Home improvement chains Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) are also due to spill numbers.
- The story from the Commerce Department's April read of retail sales (+3.0% Y/Y, +1.3% M/M) is one of a consumer spending on housing, entertainment, and personal care/fitness over apparel and general merchandise. The 10% Y/Y gain in the nonstore retailer category also tipped that the Amazon (NASDAQ:AMZN) Effect is magnifying.
- Amplify ETFs CEO Christian Magoon tells Seeking Alpha that the traditional retail model appears to be broken. Amplify's Online Retail ETF (NASDAQ:IBUY) is a bet on companies such as Netflix (NASDAQ:NFLX), GrubHub (NYSE:GRUB), Blue Nile (NASDAQ:NILE), and Shopify (NYSE:SHOP) that are reeling in millennial dollars.
- Magoon on retail: "Traditional retailers face the headwinds of higher cost structures including the very real threat of increasing wages in the form of the $15 minimum wage campaign. Less flexible with inventory management, they also are more vulnerable to issues like weather and changing consumer preferences."
- Retail ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, FXD, IYC, RHS, FDIS, PEJ, FSTA, PSL, SCC, RCD, UCC, PEZ, PMR, PSCC, UGE, PSCD, SZK, BITE.
- Apparel stocks: KATE, ANN, LULU, PVH, VNCE, CRI, UA, HBI, VFC, COLM, GIL, SQBG, JCP, KSS, DDS, M, JWN, ARO, AEO, ANF, WTSL, TLYS, CACH, ZUMZ, PSUN, EXPR, BKE, GIII, SQBG, HBI, VRA, ICON, SHOO, PERY, DXLG, BONT, GES, URBN, RL,GIL, NKE, OXM, HBI, VNCE, PERY, ICON, FL.
Thu, Apr. 7, 12:55 PM
- Mall retailers are trading off today after the news on traffic trends from the small batch of monthly reporters didn't impress.
- Another potential factor was the overall gloomy tone from Pacific Sunwear's (PSUN -45.3%) bankruptcy filing on younger consumers. The retailer noted that discretionary spending from the key demographic is going to dining and technology over apparel.
- Notable decliners include J.C. Penney (JCP -5.1%), Nordstrom (JWN -4.5%), Dillard's (DDS -5.1%), Sears Holdings (SHLD -3.6%), Gap (GPS -3.8%), American Eagle Outfitters (AEO -3.9%), Urban Outfitters (URBN -3.9%), Abercrombie & Fitch (ANF -3%), Express (EXPR -2.2%), Guess (GES -2%), Bucke (BKE -10.2%), Zumiez (ZUMZ -4.4%), and Aeropostale (ARO -9.6%).
- Now read A Few Thoughts Inspired By Saturday Shopping
Thu, Apr. 7, 6:34 AM
- Struggling Pacific Sunwear of California (NASDAQ:PSUN) has filed for bankruptcy protection, the latest youth-oriented clothing chain to falter in an increasingly cut-throat retail environment.
- Golden Gate Capital, a private equity firm that loaned $60M to the retailer in 2011, is said to have worked out a deal that will help PacSun avoid liquidation and get financing to continue operating during the restructuring process.
- The prearranged bankruptcy agreement involves swapping debt for equity after the company emerges from Chapter 11.
Thu, Apr. 7, 6:25 AM
Tue, Apr. 5, 8:39 AM
- Pacific Sun (NASDAQ:PSUN) is prepping to file for bankruptcy, according to media reports. An official filing could arrive as early as next week.
- The retailer has faded over the last few years due in a large part to its inability to connect with teenagers.
- Shares of PSUN are down 26% in premarket action after a large gain yesterday.
- Now read How To Play The Secular Move Of Retail Online
Mon, Mar. 7, 9:47 AM
- TPG Capital reduced the value of its position in J. Crew by 84%, according to Bloomberg.
- J. Crew has suffered from some of the same assortment issues as Gap as well as broad traffic declines.
- Last Friday, Pacific Sunwear (PSUN -4.8%) announced that it hired financial advisers with its debt woes mounting. Shares of PSUN are down 92% over the last 52 weeks as investors fail to see a way out for the company.
- Related: Goldman Sachs picks through the specialty apparel sector (Mar. 07 2016)
Dec. 24, 2015, 7:29 AM
- Traffic at physical stores fell 10.4% last weekend, according to RetailNext, while sales fell 6.7%. That's worse than the 8% drop in traffic and 5.8% decline in sales recorded from Nov. 10 through Dec. 14.
- Source: WSJ
- At least there's last minute shopping, but online retailing is making fast gains there as well. Naturally, this is testing the limits of delivery services, with chains including Eddie Bauer and Pacific Sunwear (NASDAQ:PSUN) warning customers of delays, noting broader issues at FedEx (NYSE:FDX).
- FedEx is running 24/7 to “accommodate additional unforeseen volume from some customers,” but says its delivery network is performing as expected. UPS says it's running about 98% on time.
- All this is pushing traditional retailers into deeper promotions, and to keep their stores open for even longer stretches leading up to Christmas Eve. Kohl's (NYSE:KSS) opened at 7 AM on Dec. 17 and won't close until more than 170 hours later at 6 PM ET tonight. At Gap's (NYSE:GPS) Old Navy, the entire store is up to 75% off through Dec. 28, Macy's (NYSE:M) is offering "after Christmas prices now," and Abercrombie & Fitch (NYSE:ANF) is discounting the entire store by 40-60%.
- Online retailers, on the other hand, "aren't playing the big promotion game as much," according to PwC.
Dec. 23, 2015, 5:41 PM
- A few retailers are warning customers that their holiday packages are being delayed and blaming what they say are broader problems at FedEx (NYSE:FDX), according to a WSJ report.
- Officials at Eddie Bauer and Pacific Sunwear (NASDAQ:PSUN) have said this week that FDX is experiencing a backlog that is "delaying standard shipments by several days or even weeks, [and] all online merchants are affected."
- Other retailers, including Wal-Mart (NYSE:WMT), say their orders are shipping normally.
- FDX says it is running operations around the clock to "accommodate additional unforeseen volume from some customers," but that its delivery network is “performing as designed for the forecasted volumes from our major retail and e-tail customers."
- Industry consultants who work with retailers tell WSJ that the networks of both FDX and rival UPS appeared to be at capacity this week, and the companies were enforcing volume limits on some retailers.
Dec. 2, 2015, 4:10 PM
- Pacific Sunwear of California (NASDAQ:PSUN): Q3 EPS of -$0.05 beats by $0.03.
- Revenue of $205.92M (-3.0% Y/Y) beats by $7.95M.
- Shares +11.1%.
Dec. 1, 2015, 5:35 PM
Nov. 25, 2015, 9:26 AM
- The average price for a gallon of gas in the U.S. has now dropped to $2.06 per gallon - a mark that is 27% lower than where gas prices stood heading into the holiday period last year. Despite the extra dollars in the wallets of consumers, most forecasts for holiday retail sales are on the modest side (below 4%).
- The extended period of sub-$3 gas prices in the U.S. hasn't exactly lit consumer spending across broad retail on fire (just ask Wal-Mart) - although it has stoked auto sales for the Detroit Three (GM, F, FCAU). The regional casino sector (ISLE, PENN, BYD, ERI, MTN, MCRI) and cruise line stocks (NCLH, RCL) have also benefited more than major chain stores. Some have suggested that lower gas prices are also an understated driver for Starbucks (NASDAQ:SBUX) and Netflix (NASDAQ:NFLX) which both score high on customer stickiness.
- What next? Seeking Alpha's Stock Pitch Contest on retail is still open until November 30 amid the reset on consumer spending expectations. Current long ideas include PLAY, FRAN, CASY, SKX, WMT, PSUN, HGG, PRTY, TJX, TA, VSTO - while short bets on WMAR, TIF, RT, AMZN, UA, LB, and OUTR are on record.
- Related ETFs: XLP, XLY, VDC, XRT, VCR, RTH, RETL, FXG, PBJ, IYK, IYC, FXD, PEJ, FDIS, RHS, FSTA, SCC, UCC, RCD, PMR, PEZ, UGE, PSL, PSCC, PSCD, SZK, BITE.
Nov. 20, 2015, 11:47 AM
- The S&P Retail ETF (NYSEARCA:XRT) is up 1.9% with apparel and footwear stocks doing much of the heavy lifting.
- A vibrant rally in sports stocks was sparked by earnings reports and Nike. Iconix Brand (ICON +2.5%), G-III Apparel (GIII +3%), DSW (DSW +3.7%), Finish Line (FINL +3.1%), Caleres (CAL +2.2%), Genesco (GCO +3.5%), and Shoe Carnival (SCVL +1.7%) join the list reported on earlier.
- Luxury names are on the move with Kate Spade (KATE +2%), Fossil (FOSL +2.9%), Coach (COH +1.4%), and Movado (MOV +2.7%) higher.
- The beat-up mall retailer group is also recovering after results from Gap (GPS +6%) and Abercrombie & Fitch (ANF +19.4%) topped worst-case scenarios. American Eagle Outfitters (AEO +2.3%), Guess (GES +4.6%), and Pacific Sunwear (PSUN +5.4%) are notable gainers.
- Big box retailers are the laggards today. Wal-Mart, Target (TGT +0.6%), and Costco (COST +0.6%) are right at market index averages.
Oct. 6, 2015, 8:16 AM
- A new survey indicated 44% of online shoppers turn to Amazon.com first when searching for a product online. The level is much higher than what was found in previous studies.
- Another 34% use Google and other search engines to being their shopping efforts, while only 21% begin their search directly on the website of a retailer.
- The gains by Amazon in becoming the shopping portal for a higher percentage of consumers hits a wide variety of retailers - including Target (NYSE:TGT), Wal-Mart (NYSE:WMT), Staples (NASDAQ:SPLS), and Best Buy (NYSE:BBY) - on market share and pricing leverage. It's been particularly devastating to mall chains such as Aeropostale (NYSE:ARO), American Eagle Outfitters (NYSE:AEO), Buckle (NYSE:BKE), Pacific Sunwear (NASDAQ:PSUN), and Abercombie & Fitch (NYSE:ANF) which rely on impulse buying from in-store shoppers.
Sep. 21, 2015, 1:08 PM
- Select specialty retailers are higher today as investors continue to speculate over which company will catch the interest of private equity firms looking at a go-private deal.
- Zumiez (ZUMZ +3.9%), Buckle (BKE +1.7%), Francesca's Holdings (FRAN +2.2%), and Pacific Sunwear (PSUN +2.9%) are the names in the deal hopper. All four are sharply lower YTD to levels no wseen as attracting PE interest
Sep. 9, 2015, 7:54 AM
- Pacific Sunwear of California (NASDAQ:PSUN) is down sharply following a FQ2 earnings miss and weak guidance.
- Comparable-store sales declined 6% in FQ2 as key summer items such as shorts, swim gear, and sandals saw disappointing demand.
- The company expects revenue of $196M to $203M in FQ3 vs. $212M consensus off a negative comp (-6% to -3%).
- Previously: Pacific Sunwear of California misses by $0.04, misses on revenue (Sep. 08 2015)
- PSUN -16.7% premarket to $0.50.
Sep. 8, 2015, 4:01 PM
- Pacific Sunwear of California (NASDAQ:PSUN): FQ2 EPS of -$0.06 misses by $0.04.
- Revenue of $195.62M (-7.6% Y/Y) misses by $9.02M.
Pacific Sunwear of California, Inc. is a specialty retailer rooted in the action sports, fashion and music influences of the California lifestyle. The company sells a combination of branded and proprietary casual apparel, accessories and footwear designed to appeal to teens and young adults. It... More
Industry: Apparel Stores
Country: United States
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