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Shares of Pacific Sunwear of California, Inc. (PSUN) Drop to Multi-Year Low on Second Quarter Earnings and Weak Guidance

Pacific Sunwear of California Inc. (NASDAQ: PSUN), a retail operator that sells casual apparel, accessories and footwear, including shorts, pants, overshirts, sweatshirts, outerwear and sunglasses, recently announced its financial results from the second quarter. Shares plunged to a multi-year low late last week after the company reported only a marginal increase in same-store sales compared to the year-earlier period.

Total sales reached $312.7 million for the quarter, a slight increase over total sales of $311.8 million for the second quarter of fiscal 2007. Total same-store sales declined 1 percent during the second quarter of fiscal 2008. Income from continuing operations totaled $3.7 million, or $0.06 per diluted share, for the second quarter of fiscal 2008 compared to income from continuing operations of $9.3 million, or $0.13 per diluted share, for the second quarter of fiscal 2007.

Due to poor back-to-school sales and the current economic climate, the company expects third quarter earnings per share of $0.00 to $0.05, with the anticipation of stronger earnings per share in the fourth quarter, ranging between $0.11 and $0.16. On the news of the financial results, several analysts provided their outlook for the company in the near term. Citigroup maintained its Sell rating and Baird downgraded Pacific Sunwear of California to Neutral from Outperform and cut its target share price to $8 per share from $13 per share.

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