Pacific Sunwear of California Inc has posted a wider second quarter loss as it was hit by charges associated with the closure of 74 of its Demo units.

For the three months to 4 August, net loss was $10.5m, or a loss of $0.15 per diluted share, compared to net income of $9.7m, or $0.14 per diluted share, in the same period of the prior year.

Lease termination and other liquidation charges associated with the closure of 74 Demo stores closed accounted for $0.14 per diluted share of the loss the company said.

Total sales for the quarter were up 9.7% to $344.2m from $313.7m. Total same-store sales increased 1.8%, with a 3% rise at PacSun stores offset by a 10.7% fall in Demo same-store sales.

"Our second quarter results underscore that while elements of our efforts to improve the PacSun stores are showing progress, we still have a lot of work to do," commented Sally Frame Kasaks, chief executive officer.

"July ended much weaker than we projected, which we believe was in part due to the impact of the late back to school starts in Florida and Texas, two of our most significant markets.

"On a positive note, strength in our PacSun juniors' business is an indicator that we have identified the right fashion trends for back to school."

For the first half, net loss was $15.6m compared to net income of $21.6m in the prior year period. Total sales rose 8.4% to $664.8m from $613.6m.
Total company same-store sales in the six month period increased 0.4%. By concept, PacSun same-store sales increased 1.9% and Demo same-store sales dropped by 11.5%.

The company reiterated its third quarter GAAP earnings in the range of $0.10 to $0.13 per diluted share.