Updated from 4:45 p.m. EDT
Catching a wave of higher sales,
reported rising revenue on Monday.
The teen-clothing retailer earned $13.4 million, or 26 cents a share, in its second quarter ended Aug. 2. The company's net income was up 83% from the same period a year ago, when it earned $7.3 million, or 15 cents a share.
Pacific Sunwear's sales increased 22.8% from the second quarter last year to $234.4 million.
The company's results topped analysts' estimates. Wall Street had been expecting the company to earn 25 cents a share on $229.5 million in revenue, according to Thomson First Call. Last week, the company raised its earnings guidance to 25 cents to 26 cents a share from its previous estimate of 23 cents a share.
Analysts have projected that Pacific Sunwear will earn 39 cents a share in its third quarter and $1.33 for its full fiscal year. On a conference call with investors and analysts, company officials said they were "comfortable" with those estimates.
The company's revenue growth was driven by a standout performance in same-store sales. Same-store sales compare results at like outlets open for more than one year. On this basis, Pacific Sunwear's sales grew 13.9% in the quarter.
Pacific Sunwear benefited from strong sales at both its Demo and namesake chains. Same-store sales at Demo increased 21.9%, while comparable-store sales at Pacific Sunwear-branded stores grew 13.2%.
But strong sales weren't the only things helping Pacific Sunwear's bottom line. The company also controlled costs in the quarter, relative to its sales surge.
As a portion of sales, the company's gross margin -- the difference between what it charges customers for its products and what it pays suppliers for them -- grew 2.3 percentage points to 34.1%. Among the factors helping boost gross margin were higher markups and decreased distribution and occupancy costs as a portion of sales, company officials said.
Meanwhile, the company's sales, general and administrative costs declined 56 basis points as a portion of revenue. Payroll and store relocation costs dropped as a portion of sales in the quarter. Partially offsetting those declines was a $2.1 million expense for restricted stock in the quarter in relation to a grant to Greg Weaver, the company's CEO.
Separately on Monday, Pacific Sunwear announced a 3-for-2 stock split. The record date of the split will be August 25. This is the sixth such split the company has initiated in the past seven years.
The company's shares closed regular trading off 35 cents, or 1.2%, to $30.20. In after-hours trading, Pacific Sunwear's stock rose 40 cents, or 1.3%, to $30.60.