Out of the Gate: Pacific Sunwear shares up after sales data

The stock rose 32 cents, or 2.6 percent, to $12.69 after the opening bell.

Pacific Sunwear reported its April same-store sales rose 4 percent, below Wall Street's expectations for a 5.6 percent increase.

Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

But Robert W. Baird & Co. analyst Mitch Kummetz maintained an "Outperform" rating after the results.

"Pacific Sunwear seems to be heading in the right direction with its turnaround, and this has been reflected in its apparel (same-store sales)," Kummetz said in a note to clients.

The company's decision to get rid of its Demo and One Thousand Steps branded stores eliminates square footage growth potential, since the PacSun stores are "mature concepts," he said. But that doesn't mean the company can't grow, as management has guided to improving operating margins from 6 percent to the low double digits.

Kummetz raised his 2008 earnings estimate to 73 cents per share from 71 cents per share. Analysts polled by Thomson Financial expect, on average, earnings of 73 cents per share for the year.

His $15 price target implies he expects shares to rise about 21 percent over Wednesday's $12.37 close.