Pacific Sunwear of California "below average," target price reduced

01/11/08 - Caris & Company

NEW YORK, January 11 (newratings.com) - Analyst Scott Birkby of Caris & Company maintains his "below average" rating on Pacific Sunwear of California Inc (PSUN), while reducing his estimates for the company. The target price has been reduced from $12 to $11.

In a research note published this morning, the analyst mentions that the company has posted its PacSun segment comp store sales growth short of expectations. The sustained weakness in the footwear and accessory categories is likely to restrict the extent of gross profit margin recovery in FY08, the analyst says. The company has reduced its non-GAAP EPS guidance for 4Q from $0.32-$0.33 to $0.29-$0.32. The EPS estimates for 4Q and FY08 have been reduced from $0.33 to $0.29 and from $0.80 to $0.72, respectively.