Here's what Liz had to say about her move:
"Although we expect a small and relatively limited Back-to-School season this year, we believe PacSun stores are well positioned in terms of price and content to capture market share. In addition, based on our channel checks, we believe inventory levels appear under control and compared to
last year, there is a reasonable amount of clearance merchandise (which we believe is an essential traffic driver in the current environment), a strong presentation in denim as well as considerable newness in tops, hoodies and backpacks/bags.
"However, traffic patterns remain erratic and event driven and the macroeconomic environment has not improved and in fact, confidence levels suggest there is no reason to believe in a meaningful rebound in consumer spending in the near future.
"Moreover, due to financial concerns, Florida has ‘opted out' of offering its residents a tax free sales event this year and even though we expect companies to compensate for the loss of the event, for any company that has a significant exposure to the state (PSUN has approximately 7% of its store base in Florida), there could be an adverse top line impact.
"Accordingly, we expect the second half of the year to be even more challenging and promotional than we had originally expected making it very difficult to drive positive comp sales and margin gains.
"Therefore, we have taken a look at our second half estimates and decided to make the following changes to our estimates: We are maintaining our Q2 $0.04, lowering our Q3 to $0.26 from $0.28 but increasing our Q4 to $0.39 from $0.37. Thus, our FY2008 EPS estimate remains at $0.59. We are also lowering our FY2009 EPS estimate to $0.75 from $0.80.
GDP figures for Q2 disappoint economists
Government gross domestic product figures released this morning show the economy grew less than expected in the second quarter.
Revised government figures also show the U.S. economy contracted in the fourth quarter of 2007.
The U.S. economy grew at a 1.9 percent annualized rate in the second quarter, lower than the 2.3 percent gain many economists had forecast.
Economists quoted in a Bloomberg news story say the numbers do not bode well for the second half of the year, especially as the boost from stimulus checks fades.
However, the economy grew more in the second quarter than the first quarter. During the first quarter, the economy grew 0.9 percent.
Second quarter economic growth came from strength in exports and consumer spending, which inched up from the first quarter. Housing continued to decline but by less than in the first quarter, the government said.
The Commerce Department also said the economy contracted at a 0.2 percent annual pace in the fourth quarter of last year compared with a previously reported 0.6 percent gain.
The last time the economy shrunk was in the third quarter of 2001, according to Bloomberg news.
The technical definition of a recession is a contraction in gross domestic product for two consecutive quarters.