D.A. Davidson Reiterates Neutral Rating, $2 PT on Pacific Sunwear of California

In a report published Friday, D.A. Davidson & Co. reiterated its Neutral rating and $2.00 price target on Pacific Sunwear of California

. D.A. Davidson noted, “3Q results demonstrate continued progress. PSUN reported comps, revenue and non-GAAP EPS of 1%, $228.4 million and $(0.03), in line with consensus at 1.3%, $225.9 million and $(0.03). Our estimates were 2.0%, $223.9 million and $(0.02), respectively. GAAP EPS came in at $0.01. Women's comps climbed 2% while men's comps were flat. Gross margin improved over 300bp year-over-year (y/y) to 27.4% driven by a 260bp improvement in merchandise margin. SG&A of $62.1 million was slightly below our estimate of $62.5 million. Both gross margin and SG&A were in line with guidance. The company also announced that based on favorable lease negotiations and store productivity improvements, it now plans on closing 20 fewer stores in 4Q than previously expected.” Pacific Sunwear of California closed on Thursday at $1.89.