Pacific Sunwear's Profit Drops

Higher costs offset revenue growth.
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Teen-clothing retailer,

Pacific Sunwear of California

(PSUN)

said Thursday that its first-quarter profit fell 33% from a year ago, as results were hurt by higher costs.

Pacific Sunwear earned $11.9 million, or 16 cents a share, including 3 cents a share related to stock option and pre-opening rent expenses. A year earlier, the retailer earned $17.6 million, or 23 cents a share. Analysts surveyed by Thomson First Call were expecting earnings of 16 cents a share in the most recent quarter.

The Anaheim, Calif.-based retailer's sales rose 7.1% to $299.9 million for the quarter ended April 29. Analysts were expecting revenue of $300.6 million. Same-store sales, or sales at stores open at least a year, declined 1.8%.

The company's operating profit fell 36% to $17.3 million, while operating profit margin declined 394 basis points to 5.8%.

Pacific Sunwear projected second-quarter earnings of 26 cents to 28 cents a share, including 3 cents a share of options expense. The company sees same-store sales growing in the low- to mid-single digits.

For the full fiscal year, the company projects earnings of $1.84 to $1.92 a share. Analysts were forecasting earnings of 28 cents a share for second quarter and $1.72 a share for full year.

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