Pacific Sunwear Tumbles On Disappointing 3Q View

NEW YORK (AP) — Pacific Sunwear of California Inc. stock sank in morning trading Friday after the surf and skatewear chain announced deep sales declines and a disappointing third-quarter outlook.

On Thursday, Anaheim, Calif.-based Pacific Sunwear of California Inc. predicted a third-quarter loss of 16 cents to 23 cents per share — much worse than the per-share loss of 9 cents forecast by analysts polled by Thomson Reuters.

During the second quarter, the retailer's same-store sales slid 24 percent. Same-store sales, or sales at stores open at least a year, are an important retail performance metric. For the third quarter, Pacific Sunwear expects a same-store sales drop in the high teens to low twenties.

While the teen retailer's re-emphasis on brands, footwear and accessories is the right track, analysts said, it's a long path back to a recovery given the heavy sales drops of the past two years.

A sense of lost authenticity has cost the company customers, said Thomas Weisel analyst Liz Dunn. She thinks adding new brands might also be difficult.