Pacific Sunwear Of California (PSUNQ) 8-K Pacific Sunwear Announces First Quarter Earnings Results

Exhibit 99.1

CONTACT:
Gar Jackson
Vice President, Investor Relations
(714) 414-4049

FOR IMMEDIATE RELEASE

PACIFIC SUNWEAR ANNOUNCES
FIRST QUARTER EARNINGS RESULTS

ANAHEIM, CA/May 21, 2009— Pacific Sunwear of California, Inc. (NASDAQ:PSUN) (the “Company”) today announced that net sales for the first quarter (13 weeks) of fiscal 2009 ended May 2, 2009, were $223.5 million versus net sales from continuing operations of $266.9 million for the first quarter (13 weeks) of fiscal 2008 ended May 3, 2008. Total Company same-store sales decreased 18 percent during the period.

The Company recorded a net loss of $8.7 million, or $(0.13) per diluted share, for the first quarter of fiscal 2009 compared to a net loss from continuing operations of $12.0 million, or $(0.17) per diluted share, for the first quarter of fiscal 2008.

“While we continue to face a very difficult sales environment, we are pleased with the results of our efforts to manage expenses and inventories. We ended the quarter with $32 million in cash and no credit facility borrowings,” commented Sally Frame Kasaks, Chief Executive Officer. “We are cautious about business in future quarters but remain singularly focused on executing our strategies.”

Financial Outlook for Second Fiscal Quarter of 2009

Assuming a same-store sales percentage decline in the range of 17 to 20 percent, the Company currently expects to report a loss of $(0.11) to $(0.17) per diluted share for the second quarter of fiscal 2009.

About Pacific Sunwear of California, Inc.

Pacific Sunwear is a leading lifestyle specialty retailer rooted in the youth culture and fashion vibe of Southern California. The Company sells casual apparel with a limited selection of accessories and footwear designed to meet the needs of teens and young adults. As of May 2, 2009, the Company operated 927 stores in 50 states and Puerto Rico. PacSun’s website address is www.pacsun.com.

The Company will host a conference call today at 4:45 pm Eastern time to review its financial results. A telephonic replay of the conference call will be available, beginning approximately two hours following the call, for one week and can be accessed in the United States/Canada at (800) 642-1687 or internationally at (706) 645-9291; pass code: 99066033. For those unable to listen to the live Web broadcast or utilize the call-in replay, an archived version will be available on the company’s investor relations web site through midnight, August 19, 2009.

3450 East Miraloma Avenue• Anaheim, CA 92806• (714) 414-4000

Pacific Sunwear Safe Harbor

This press release contains “forward-looking statements” including, without limitation, statements regarding the Company’s financial outlook for the second quarter of fiscal 2009 and its cautious expectations as to its business in future quarters. In each case, these statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company intends that these forward-looking statements be subject to the safe harbors created thereby. These statements are not historical facts and involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements. Uncertainties that could adversely affect our business and results include, among others, the following factors: additional adverse changes in economic conditions generally; additional adverse changes in consumer spending; changes in consumer demands and preferences; higher than anticipated markdowns and/or higher than estimated selling, general and administrative costs; competition from other retailers and uncertainties generally associated with apparel retailing; merchandising/fashion sensitivity; sales from private label merchandise; reliance on key personnel; economic impact of natural disasters, terrorist attacks or war/threat of war; shortages of supplies and/or contractors, as a result of natural disasters or terrorist acts, could cause unexpected delays in new store openings, relocations, renovations or expansions; reliance on foreign sources of production; and other risks outlined in the company’s SEC filings, including but not limited to the Annual Report on Form 10-K for the year ended January 31, 2009 and subsequent periodic reports filed with the Securities and Exchange Commission. Historical results achieved are not necessarily indicative of future prospects of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur after such statements are made. Nonetheless, the Company reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

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3450 East Miraloma Avenue• Anaheim, CA 92806• (714) 414-4000

PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except share and per share data)

	First Quarter Ended
	05/02/09			05/03/08
Net sales	$	223,465		$	266,867
Gross margin		61,274			75,465
Selling, G&A expenses		76,769			95,812
Operating loss from continuing operations		(15,495	)		(20,347	)
Other expense (income), net		229			(758	)
Loss from continuing operations before income taxes		(15,724	)		(19,589	)
Income tax benefit		(6,981	)		(7,620	)
Loss from continuing operations		(8,743	)		(11,969	)
Loss from discontinued operations, net of tax benefit		—			(25,133	)
Net loss	$	(8,743	)	$	(37,102	)
Loss from continuing operations per share:
Basic	$	(0.13	)	$	(0.17	)
Diluted	$	(0.13	)	$	(0.17	)
Net loss per share:
Basic	$	(0.13	)	$	(0.53	)
Diluted	$	(0.13	)	$	(0.53	)
Weighted average shares outstanding:
Basic		65,207,991			69,915,802
Diluted		65,207,991			69,915,802

PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)

	05/02/09		01/31/09		05/03/08
ASSETS
Current assets:
Cash & cash equivalents	$	32,274	$	24,776	$	42,645
Inventories		115,518		107,205		167,508
Other current assets		49,601		58,943		87,808
Total current assets		197,393		190,924		297,961
Property and equipment, net		312,896		323,344		365,561
Other long-term assets		46,809		55,241		39,653
Total assets	$	557,098	$	569,509	$	703,175
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	53,913	$	45,263	$	72,711
Other current liabilities		39,161		47,564		70,820
Total current liabilities		93,074		92,827		143,531
Deferred lease incentives		49,155		52,313		61,375
Deferred rent		22,730		23,008		25,261
Other long-term liabilities		29,244		29,374		35,190
Total liabilities		194,203		197,522		265,357
Total shareholders’ equity		362,895		371,987		437,818
Total liabilities and shareholders’ equity	$	557,098	$	569,509	$	703,175

3450 East Miraloma Avenue• Anaheim, CA 92806• (714) 414-4000

PACIFIC SUNWEAR OF CALIFORNIA, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(unaudited, in thousands)

	FIRST QUARTER ENDED
	05/02/09			05/03/08
Cash flows from operating activities:
Net loss	$	(8,743	)	$	(37,102	)
Depreciation & amortization		17,099			21,647
Asset impairment		1,992			8,503
Non-cash stock based compensation		955			1,289
Tax deficiencies related to exercise of stock options		(1,297	)		(388	)
Loss on disposal of property and equipment		—			687
Changes in operating assets and liabilities:
Inventories		(8,313	)		2,674
Accounts payable and other current liabilities		387			10,917
Other assets and liabilities		10,528			(32,856	)
Net cash provided by/(used in) operating activities		12,608			(24,629	)
Cash flows from investing activities:
Capital expenditures		(8,813	)		(21,006	)
Proceeds from sale of land		3,705			—
Net cash used in investing activities		(5,108	)		(21,006	)
Cash flows from financing activities:
Repurchases of common stock		—			(10,248	)
Proceeds from exercise of stock options		—			944
Net repayments under long-term leases		(2	)		(3	)
Net cash used in financing activities		(2	)		(9,307	)
Net increase/(decrease) in cash and cash equivalents		7,498			(54,942	)
Cash and cash equivalents, beginning of period		24,776			97,587
Cash and cash equivalents, end of period	$	32,274		$	42,645

PACIFIC SUNWEAR OF CALIFORNIA, INC.
SELECTED STORE OPERATING DATA

	Fiscal 2009		Fiscal 2008
Stores open at beginning of fiscal year		932		1,107
Stores opened during the period		—		3
Stores closed during the period		5		(168	)
Stores open at end of period		927		942

Note: Fiscal 2008 store closures include 153 demo stores. demo became a discontinued operation during the first quarter of fiscal 2008.

	05/02/09				05/03/08
			Square				Square
	# of		Footage		# of		Footage
	Stores		(000s)		Stores		(000s)
PacSun Core stores		525		2,086		540		2,105
PacSun Value stores		402		1,491		402		1,491
Total stores		927		3,577		942		3,596

3450 East Miraloma Avenue• Anaheim, CA 92806• (714) 414-4000