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Profit Forecast Boosts Pacific Sunwear Stock

August 04, 2000|From Dow Jones Newswires

Shares of Pacific Sunwear of California Inc. surged 29% Thursday after the apparel retailer said it expects earnings to meet Wall Street expectations despite a "difficult" second quarter.

The Anaheim company's outlook has brightened since early last month, when it warned that quarterly results probably would fall short of analysts' projections because of sluggish sales.

Indeed, the company said sales at stores open at least a year still were down 4.4% in July. But Pacific Sunwear said it expects to post quarterly earnings of 23 cents a share, matching estimates of analysts surveyed by First Call/Thomson Financial. The retailer also earned 23 cents a share in the same period last year.

The stock climbed $4.19 a share to $18.81 in Nasdaq trading. Still, the shares have lost more than 40% of their value this year.

Pacific Sunwear said total sales for the four weeks ended July 30 rose 29.2% to $43.4 million. Same-store sales fell 4.8% last month at the company's PacSun unit and rose 2.9% at its d.e.m.o. unit. A year ago, same-store sales fell 1.4% in the second quarter, while total sales rose 31.3%.

The retailer, which sells casual apparel for teens and young adults, said it was "encouraged" by early sales results of fall merchandise and is "cautiously optimistic" about back-to-school business.

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