I have a significant long position here and have been long for about a year. I'm afraid that this downtrend going into earnings reflects bad news that has gotten out to a select few. Otherwise I see no reason for the decline. My only hope is that things pick up for PSUN with the warmer weather in Q2 and Q3...
Ok, I'm going to take back my prediction, or at least a portion of it. The trading volume for PSUN is absolutely anemic, so I don't think news could have leaked out. As an example, I think 9,000 shares have traded in the first hour of trading today, and I personally accounted for one-third of them.
That said, I remain pessimistic about Q1 earnings. Recall that their last earnings call was in mid-March, and at that time they said they were tracking towards the lower end of their guidance (-4% to +1% comps), but they were hoping that things would improve. That means they were tracking to roughly -3% or -4% with only two weeks to go in the quarter! That's pretty miserable!
On the upside, I'm relatively optimistic that they will give better forward guidance than we've come to expect from PSUN. Why, you ask? 1. They're now comparing to pretty crappy performance from 2011 - when you've gone down so far, comps start to look better. 2. They've been introducing new products such as footwear. 3. Store closings SHOULD increase traffic to those that are still open, or to the website. 4. I believe we saw warm weather early this year. 5. Look at the webpage relative ranking data from the SeekingAlpha article a couple of weeks ago. All these things contribute to me thinking that Q2 comps will be better than Q1 comps. I'll go so far as to say that I expect Q2 year-over-year same store comps to be in positive territory.
Turns out I was wrong about Q1. I am SHOCKED that they were able to deliver +1% for Q1, when they must have been at -3 or -4 through the first half of the quarter. This must mean that they were roughly +5 over the second half of the quarter. Good results on bottom-line, and good guidance as well. They have to be at about +3 or +4% through the first two weeks in Q2 in order to guide at -1 to +4.
Finally, a strongly positive quarter for PSUN. Now if they can handle the call well, I think this stock will rise strongly over the next three months.
I think you are on track with the estimate. There is no doubt that the results for the previous quarter will be bad. But . . . it doesn't take much to improve on 2011 and with the store closings those with a consistant lose were eliminated and and still being eliminated. If im not mistaken closing a losing store is the same as making money. The next two quarters are going to be good or the company is going to be dead. We will know one way or another by the end of Q3.