Pacific Sunwear of California, Inc. (PSUN)
Q3 2008 Earnings Call Transcript
November 18, 2008 4:30 p.m. ET

Executives

Sally Frame Kasaks - Chairwoman of the Board, Chief Executive Officer
Michael L. Henry - Chief Financial Officer, Senior Vice President, Secretary

Analysts

Adrienne Tennant - Friedman, Billings, Ramsey & Co.
Kimberly Greenberger - Citigroup
Stephanie - Piper Jaffray
Liz Dunn - Thomas Weisel Partners
Betty Chen - Wedbush Morgan Securities
Jeffrey Van Sinderen - B. Riley & Co.
Janet Kloppenburg - JJK Research
Elizabeth Pierce - Roth Capital Partners LLC
Crystal Kallik - D. A. Davidson & Co.
Dana Telsey - Telsey Advisory Group
Tracy Kogan - Credit Suisse
Marni Shapiro - The Retail Tracker
Linda Tsai - MKM Partners
Christine Chen - Needham and Company, LLC
Roxanne Meyer - UBS
Mitch Kummetz - Robert W. Baird & Co.
Julie Bryan - Jennifer Black & Associates

Presentation

Operator

Ladies and gentlemen, welcome to the Pacific Sunwear of California conference call announcing the company’s fiscal third quarter 2008 financial results. This call is being recorded and the play-back will be available starting today approximately two hours after the call through midnight, November 25, 2008. It can be accessed at 800-642-1687, or 706-645-9291. The passcode is 72074140. The call will also be archived on the Pac-Sun website at www.pacsun.com through midnight March 11, 2009.

Your speakers today are Ms. Sally Frame Kasaks, Chief Executive Officer; and Mr. Mike Henry, Chief Financial Officer. Today’s call will be limited to one hour and questions will be limited to one per participant.

Before I turn the call over to Ms. Kasaks, I would like to note that during this earnings call certain statements and responses to questions may contain forward-looking information, including forecasts of future financial performance and estimates of amounts not yet determinable, as well as our future prospects and proposed developments of business strategies. Actual results could differ materially from those projected or reflected in our forward-looking statements and reported results should not be considered an indication of future performance.

Pacific Sunwear''s future financial condition and results of operations, as well as any forward-looking statements are subject to change and to inherent known and unknown risks and uncertainties. Pacific Sunwear does not intend and undertakes no obligation to update its forward-looking statements to reflect future events or circumstances.

All forward-looking statements made in this conference call reflect Pacific Sunwear''s current analysis of existing trends and information and represent Pacific Sunwear''s judgment only as of today.

You should not assume later in the quarter or year that the comments Pacific Sunwear makes today are still valid. Actual results may differ materially from current expectations based on a number of factors affecting Pacific Sunwear''s businesses, including changes in economic conditions generally, changes in consumer spending, demands and preferences, lower than anticipated comparable store sales, higher than anticipated markdowns, higher than estimated selling, general and administrative costs, competition from other retailers, and other uncertainties generally associated with apparel retailing.

More information on factors that could affect Pacific Sunwear''s business and financial results are included in its annual report on Form 10-K for the fiscal year ended February 2, 2008 and the other public filings made with the Securities and Exchange Commission.

In addition, please note that during this call today, additional references may be made to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures, as well as the reconciliation in our press release of these measures to the comparable GAAP. Our press release was attached to our 8-K filed with the SEC today, a copy of which can be found on our website at www.pacsun.com.

This call, the webcast, and its replay are the property of Pacific Sunwear. It is not for rebroadcast or use by any other party without the prior written consent of Pacific Sunwear. If you do not agree with these terms, please disconnect now. By remaining on the line, you agree to be bound by these terms.

With that said, I will now turn the call over to Ms. Kasaks.

Sally Frame Kasaks

Good afternoon and thank you for joining us today. I will begin the call with an overview of our third quarter results after which Mike Henry, our Chief Financial Officer, will discuss the financial details of the quarter. We will then open the lines for your questions.

It’s been well-reported that consumer spending decelerated significantly in September and October. We certainly saw this in our results for the quarter. Although we continued to make progress on our juniors business, supply chain enhancements, and e-commerce, there is no question that the deteriorating overall environment had an offsetting effect.