Wedbush Reports Disappointing Guidance On Pacific Sunwear Of California

In a report published by Wedbush, Pacific Sunwear of California's (NASDAQ: PSUN) inline Q4 is offset by disappointing guidance.

Wedbush said that it anticipates the stock to be weak following disappointing Q1 guidance, given signs of deteriorating men's business (+1% comp from +MSD in Q3) and generally soft women's category despite some improvements in swim and shorts at lower opening prices. “Moreover, based on the prolonged market share loss, management may have difficulty passing along higher input costs of 10-15% in H2 and we see potential risks to our gross margin expansion forecasts for F11. With depleting cash ($0.52 cash/share vs. $1.42 LY) and fundamental uncertainty, we maintain our UNDERPERFORM rating.”

Pacific Sunwear of California closed yesterday at $4.31.