Shares of Pacific Sunwear of California Inc. (PSUN) rallied 21% on the index yesterday after the company strong comparable store sales (comps) for December and upgraded its outlook for fourth-quarter fiscal 2014.
Comps for the month rose 9% from the year-ago period on the back of stupendous performance at both men’s and women’s categories Moreover, gross margins are likely to register an estimated 400-500 basis points (bps) improvement.
Driven by excellent numbers, management has upgraded its outlook for the fourth quarter of fiscal 2014. It now expects adjusted loss from continuing operations to narrow down to 11–12 cents per share as against the earlier guided range of a loss of 12–17 cents a share. The company reported loss of 17 cents per share in the fourth quarter of fiscal 2013.
It also expects comps to grow 6% as against an increase of 2% recorded in the prior-year quarter. The company has posted positive comps for the past 11 quarters.
The holiday shopping season this year has been an uplifting one for most retailers with many of them reporting solid sales numbers for the months of November and December. Some of the retailers that have posted positive comps data include Macy's Inc. (M), J. C. Penney Company Inc. (JCP) and Urban Outfitters Inc. (URBN).
Macy’s reported that comparable sales on an owned plus licensed basis grew 2.7% for the November and December period, whereas J. C. Penney reported an increase of 3.7% in its comps for the combined nine weeks of November and December 2014.
Urban Outfitters, which had a mediocre financial run in past few quarters, posted a 4% rise in comparable Retail segment net sales for two months ended Dec 31, 2014.
Pacific Sunwear, which is scheduled to report fourth-quarter fiscal 2014 earnings on Mar 17, 2015, at present, carries a Zacks Rank #2 (Buy).
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