Pacific Sunwear of California Inc., a teen clothing retailer, said fiscal fourth-quarter earnings rose 20%, setting a record on increased sales.
But the Anaheim-based company also said February sales at stores open at least a year, a key industry indicator, dropped 1.1%.
For the three months ended Feb. 4, net income rose to $14 million, or 43 cents a share, from $11.7 million, or 36 cents, a year earlier. Analysts had estimated earnings of 42 cents a share for the recent quarter. Revenue rose 38% to $181.2 million.
Same-store sales rose 5.2% for the quarter. Many teen retailers have been shielded from the sales- growth shortfalls other stores experienced because teenagers generally aren't as concerned about rising heating-oil prices, declining stock markets and winter storms.
The company cut prices in the quarter as it faced greater competition and had to clear "miscues" in merchandise it stocked, particularly in boys casual pants, such as wide-leg jeans and cargo pants, President Tim Harmon said in a conference call. The company plans to stop selling brightly colored cargo pants and those without pockets and will start selling more denim pants in May and June.
In the fourth quarter, the company opened 139 stores, bringing its total to 589.
For the year, the company earned $39.8 million, or $1.22 per share, up from $35.3 million, or $1.10 a share the year before. Sales rose nearly 35% to $589.4 million. Same-store sales rose 3.5% for the year.
The results were disclosed at the close of regular trading in U.S. markets. The stock moved up 88 cents to $27 a share in Nasdaq trading.