Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Pacific Sunwear (NASDAQ: PSUN ) is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Pacific Sunwear has had a tough time navigating the waters in the retail space lately, with its teen focus having proved vulnerable to the changing whims of its core customer base. Let's take an early look at what's been happening with Pacific Sunwear over the past quarter and what we're likely to see in its quarterly report on Wednesday.
Stats on Pacific Sunwear
Analyst EPS Estimate | ($0.16) |
Year-Ago EPS | ($0.19) |
Revenue Estimate | $227.9 million |
Change From Year-Ago Revenue | (2.7%) |
Earnings Beats in Past 4 Quarters | 3 |
Source: Yahoo! Finance.
Will Pacific Sunwear shine brighter this quarter?
Over the past few months, analysts have seen storm clouds on the horizon for Pacific Sunwear. They've knocked a nickel per share off their earnings calls for the just-ended quarter and reduced their full-year fiscal 2014 estimates by $0.03 per share. But the stock has soared more than 65% since mid-December in the wake of the holiday season.
It's been a long time since Pacific Sunwear has managed to earn a profit, and unfortunately, it has been slow on the uptake to try to remedy its dire situation. For more than five years, PacSun has lost money, yet its restructuring has been going on nearly that long without any serious signs of success. PacSun isn't alone in feeling the hurt, as Zumiez (NASDAQ: ZUMZ ) has suffered from similar trends, but it has taken action much more aggressively to stem the trouble before it gets worse. Quiksilver (NYSE: ZQK ) also posted a worse-than-expected loss in its holiday quarter, but it is expected to remain profitable both in the current quarter and for the rest of the year, with substantial growth looking forward into the future.
In January, PacSun gave early guidance on its holiday quarter that inspired at least some enthusiasm. The retailer managed to post a 1% gain in same-store sales, reversing a year-ago drop. Yet the company also said that most of the gains came near the end of the season, reflecting higher discounts and forcing the company to project earnings and revenue at the low end of its previously projected range.
In its quarterly report, watch PacSun closely for signs of how its new Kendall and Kylie line is performing. With the need for reinvigorated products, going with the Kardashian sisters earned upgrades from analysts and may be just the ticket that will finally turn the company's prospects around.
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