Pacific Sunwear Of California, Inc. (NASDAQ: PSUN) is caught between a rock and a hard place.  The retailer keeps managing to lose money and that is what is bringing out the wrecking ball today.  Longer-term, Pacific Sunwear’s challenges need to be addressed for its viability.

For its last quarter, sales fell to $234.2 million from $237.6 million and same store sales were flat in the period.  The loss stemmed from store closings, where 87 closings in the quarter brought the store count down to 733 stores.

The company reported a net loss on a GAAP basis of $38.1 million, or -$0.56 per share, for the fourth quarter, compared to a net loss of $35.2 million, or -$0.53 per share; on a non-GAAP basis (excluding store closure charges and the non-cash derivative liability loss) the net loss would have been $13.1 million, or -$0.19 per share versus a loss of -$20.6 million, or -$0.31 per share for the same period a year ago.

For the year is where things look bad.  A loss of -$51.3 million non-GAAP versus -$58.3 million a year earlier.  That marks three years of losses in a row and same-store sales were down 1% with total sales down less than 1%.  And for guidance, the company put same-store sales in a range of -4% to +1%.

Then there is the balance sheet with $50.3 million in cash, down from $63.7 million a year earlier.  Inventories are down to $88.7 million from $95.7 million a year earlier.  Total current liabilities grew to $107.3 million versus $83.2 million a year earlier; total liabilities grew to $242 million from $186.9 million a year earlier.

Shares are down 14% at $2.15 against a 52-week range of $1.11 to $4.42 with a market capitalization rate of $144.9 million.

Pacific Sunwear is probably not at the point of implosion, but its situation is becoming one full of less and less and hope that a turnaround can come any time soon.

JON C. OGG

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