Apparel retailer and NASDAQ listed, Pacific Sunwear of California, Inc said for the third quarter of fiscal 2014 ended November 1, 2014, it was able to cut losses year on year.
On a non-GAAP basis, excluding the non-cash gain on the derivative liability, other one-time charges, and assuming a tax benefit of approximately $1.9 million, Pacific incurred a loss from continuing operations of $2.2 million, or $0.03 per diluted share.
This compares favourably with loss from continuing operations of $3.5 million, or $0.05 per diluted share, for the same period a year ago for Pacific Sunwear which ended the third quarter of fiscal 2014 with 620 stores versus 635 stores a year ago.
Net sales from continuing operations for the third quarter of fiscal 2014 were up $212.3 million versus net sales from continuing operations of $202.8 million for the third quarter of fiscal 2013, while comparable store sales for the reporting quarter rose 4 per cent.
On a GAAP basis, the Company reported a loss from continuing operations of $0.5 million, or $0.01 on a diluted per share as against income from continuing operations of $17.7 million, or $0.24 per diluted share for the third quarter of fiscal 2013.
Pacific said loss from continuing operations for its third quarter of fiscal 2014 included a non-cash gain of $4.9 million, or $0.07 per diluted share, compared to a non-cash gain of $23.4 million, or $0.31 per diluted share for the corresponding quarter of last fiscal year.
This non-cash gain relates to the derivative liability that resulted from the issuance of the Convertible Series B Preferred Stock in connection with the term loan financing the Company completed in December 2011.
"We were very pleased with our third quarter comparable store performance, inventory productivity and continued improvement in non-GAAP EPS," said Gary Schoenfeld, chief executive officer at Pacific Sunwear.
"With eleven straight quarters of positive comparable stores sales, I believe that our elevated merchandising assortments featuring a select number of leading lifestyle brands are resonating with customers,” he added.
For the fourth quarter of fiscal 2014, Pacific expects a non-GAAP loss per diluted share from continuing operations of between $ 0.17 and $0.12, compared to $0.17 in the fourth quarter of fiscal 2013.
The forecasted fourth quarter non-GAAP loss from continuing operations per diluted share guidance range is based on revenue between $218 million to $227 million and comparable store sales between flat to 4 per cent.
The apparel retailer expects gross margin rate, including buying, distribution and occupancy to be between 21 per cent and 24 per cent and forecasts SG&A expenses to be in the range of $61 million to $65 million.
Its fourth fiscal quarter of 2014 guidance range excludes the quarterly impact of the change in the fair value of the derivative liability due to the inherently variable nature of this financial instrument. (AR)
