<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON D.C 20549

                                    FORM 10-Q

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED AUGUST 1, 1999

                                       OR

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                         Commission file number 0-21296

                       PACIFIC SUNWEAR OF CALIFORNIA, INC.

               CALIFORNIA                              95-3759463
        (State of Incorporation)           (I.R.S Employer Identification No.)

        5200 EAST LA PALMA AVENUE
           ANAHEIM, CALIFORNIA                            92807
(Address of principal executive offices)               (Zip code)

                                 (714) 693-8066
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days.

                              YES [X]       NO [ ]

        The number of shares outstanding of the registrant's Common Stock, par
value $.01 per share, at August 30, 1999 was 31,151,602.



<PAGE>   2

                       PACIFIC SUNWEAR OF CALIFORNIA, INC.

                                    FORM 10-Q
                      FOR THE QUARTER ENDED AUGUST 1, 1999

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                         PAGE
                                                                                                         ----
<S>               <C>                                                                                    <C>
PART I.           FINANCIAL INFORMATION
Item 1.           Consolidated Financial Statements:
                    Consolidated Balance Sheets as of August 1, 1999 (unaudited)
                      and January 31, 1999.................................................................3
                    Consolidated Statements of Income and Comprehensive Income  (unaudited)
                      for the second quarter and first half ended August 1, 1999
                      and August 2, 1998...................................................................4
                    Consolidated Statements of Cash Flows (unaudited)
                      for the first half ended August 1, 1999 and August 2, 1998...........................5
                    Notes to Consolidated Financial Statements...........................................6-7

Item 2.           Management's Discussion and Analysis of Financial Condition
                    and Results of Operations...........................................................8-14

Item 3.           Quantitative and Qualitative Disclosures About Market Risk..............................14

PART II.          OTHER INFORMATION
Item 1.           Legal Proceedings.......................................................................15
Item 2.           Changes in Securities and Use of Proceeds...............................................15
Item 3.           Defaults Upon Senior Securities.........................................................15
Item 4.           Submission of Matters to a Vote of Security Holders.....................................15
Item 5.           Other Information.......................................................................15
Item 6.           Exhibits and Reports on Form 8-K........................................................15

                  SIGNATURE PAGE..........................................................................16
</TABLE>



                                        2

<PAGE>   3

                       PACIFIC SUNWEAR OF CALIFORNIA, INC.

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                      AUGUST 1,            JANUARY 31,
                                                                        1999                  1999
                                                                    -------------         -------------
                                                                     (Unaudited)
<S>                                                                 <C>                   <C>
CURRENT ASSETS:
  Cash and cash equivalents (Note 2)                                $  12,142,073         $  19,031,738
  Accounts receivable                                                   3,903,571               899,179
  Merchandise inventories                                              64,895,312            42,469,829
  Prepaid expenses, includes $4,165,073 and
     $3,620,435 of prepaid rent, respectively                           6,344,107             5,044,941
  Prepaid income tax                                                           --               713,402
  Deferred taxes                                                        1,944,275             1,944,275
                                                                    -------------         -------------
    Total current assets                                               89,229,338            70,103,364
PROPERTY AND EQUIPMENT:

  Leasehold improvements                                               57,262,899            47,877,157
  Furniture, fixtures and equipment                                    55,892,201            45,819,759
                                                                    -------------         -------------
                                                                      113,155,100            93,696,916
  Less accumulated depreciation and amortization                      (31,291,472)          (26,773,496)
                                                                    -------------         -------------
    Net property and equipment                                         81,863,628            66,923,420

OTHER ASSETS:
  Goodwill, net of accumulated amortization of
     $917,121 and $758,180, respectively                                7,446,622             7,605,563
  Deferred compensation and other assets (Note 6)                       4,574,745             3,142,504
                                                                    -------------         -------------
    Total other assets                                                 12,021,367            10,748,067
                                                                    -------------         -------------
              Total assets                                          $ 183,114,333         $ 147,774,851
                                                                    =============         =============

                                  LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                  $  30,198,966         $  13,867,906
  Accrued liabilities (Note 5)                                         10,027,599             8,690,783
  Income taxes payable                                                    710,032                    --
                                                                    -------------         -------------
    Total current liabilities                                          40,936,597            22,558,689
DEFERRED COMPENSATION                                                   3,399,078             2,826,531
OTHER LONG-TERM LIABILITIES                                                28,316                28,316
DEFERRED RENT                                                           5,165,458             4,689,772
DEFERRED TAXES                                                            974,522               974,522

SHAREHOLDERS' EQUITY:

  Preferred stock, par value $.01; authorized,
      5,000,000; none issued and outstanding
  Common stock, par value $.01; authorized, 75,937,500
      shares; issued and outstanding, 31,031,203
      and 30,650,778 shares, respectively                                 310,312               306,508
  Additional paid-in capital                                           64,366,770            59,800,206
  Retained earnings                                                    67,933,280            56,590,307
                                                                    -------------         -------------
    Total shareholders' equity                                        132,610,362           116,697,021
                                                                    -------------         -------------
                  Total liabilities and shareholders' equity        $ 183,114,333         $ 147,774,851
                                                                    =============         =============
</TABLE>



                             See accompanying notes



                                        3

<PAGE>   4

                       PACIFIC SUNWEAR OF CALIFORNIA, INC.

                      CONSOLIDATED STATEMENTS OF INCOME AND
                              COMPREHENSIVE INCOME

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           FOR THE SECOND QUARTER ENDED          FOR THE FIRST HALF ENDED
                                                          -------------------------------    --------------------------------
                                                          AUGUST 1, 1999   AUGUST 2, 1998    AUGUST 1, 1999    AUGUST 2, 1998
                                                          --------------   --------------    --------------    --------------
<S>                                                       <C>              <C>               <C>               <C>
Net sales                                                  $100,454,111      $73,203,194      $181,897,021      $134,365,444
Cost of goods sold, including buying,
  distribution and occupancy costs                           65,655,399       48,627,331       120,953,186        90,182,545
                                                           ------------      -----------      ------------      ------------
Gross margin                                                 34,798,712       24,575,863        60,943,835        44,182,899
Selling, general and administrative expenses                 23,050,993       16,594,562        42,732,285        31,742,087
                                                           ------------      -----------      ------------      ------------
Operating income                                             11,747,719        7,981,301        18,211,550        12,440,812
Interest income                                                 126,185          219,346           238,423           539,749
                                                           ------------      -----------      ------------      ------------
Income before income tax expense                             11,873,904        8,200,647        18,449,973        12,980,561
Income tax expense (Note 4)                                   4,574,000        3,234,000         7,107,000         5,127,000
                                                           ------------      -----------      ------------      ------------
Net income                                                 $  7,299,904      $ 4,966,647      $ 11,342,973      $  7,853,561
                                                           ============      ===========      ============      ============
Comprehensive income (Note 1)                              $  7,299,904      $ 4,966,647      $ 11,342,973      $  7,853,561
                                                           ============      ===========      ============      ============

Net income per share, basic (Note 3)                       $       0.24      $      0.16      $       0.37      $       0.25
                                                           ------------      -----------      ------------      ------------

Net income per share, diluted (Note 3)                     $       0.23      $      0.15      $       0.36      $       0.24
                                                           ------------      -----------      ------------      ------------
Weighted average shares outstanding, basic (Note 3)          30,926,234       31,145,727        30,829,159        31,079,381
                                                           ============      ===========      ============      ============
Weighted average shares outstanding, diluted (Note 3)        32,048,185       32,440,152        31,954,600        32,351,240
                                                           ============      ===========      ============      ============
</TABLE>


                             See accompanying notes



                                        4

<PAGE>   5

                       PACIFIC SUNWEAR OF CALIFORNIA, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               FOR THE FIRST HALF ENDED
                                                                            ---------------------------------
                                                                           AUGUST 1, 1999       AUGUST 2, 1998
                                                                           --------------       --------------
<S>                                                                         <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                  $ 11,342,973         $  7,853,561
Adjustments to reconcile net income to net cash provided by
   operating activities:
   Depreciation and amortization                                               6,486,908            4,649,891
   Change in:
     Accounts receivable                                                      (3,004,392)            (597,412)
     Merchandise inventories                                                 (22,425,483)         (15,721,174)
     Prepaid expenses                                                         (1,299,166)            (596,419)
     Deferred compensation and other assets                                     (884,696)             641,767
     Accounts payable                                                         16,331,060            7,740,824
     Accrued liabilities                                                       1,627,170           (1,383,971)
     Income taxes and deferred income taxes                                    3,872,858             (588,437)
     Deferred rent                                                               475,686              570,580
                                                                            ------------         ------------
        Net cash provided by operating activities                             12,522,918            2,569,210
CASH FLOWS FROM INVESTING ACTIVITIES:
   Short term investment maturities                                                   --           12,742,666
   Investment in property and equipment                                      (21,243,173)         (17,814,372)
                                                                            ------------         ------------
        Net cash used in investing activities                                (21,243,173)          (5,071,706)
CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash paid in lieu of fractional shares due to 3-for-2 stock split             (10,598)             (28,929)
   Proceeds from exercise of stock options                                     1,841,188              711,551
                                                                            ------------         ------------
        Net cash provided by financing activities                              1,830,590              682,622
                                                                            ------------         ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS:
                                                                              (6,889,665)          (1,819,874)
  CASH AND CASH EQUIVALENTS, beginning of period                              19,031,738           14,781,566
                                                                            ------------         ------------
  CASH AND CASH EQUIVALENTS, end of period                                  $ 12,142,073         $ 12,961,692
                                                                            ============         ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest                                                                  $         --         $         --
  Income taxes                                                              $  3,234,142         $  5,715,437
</TABLE>

-------------------------------------------------------------------------------

Non-cash transaction: During the first half ended August 1, 1999 and August 2,
1998, the Company recorded an increase to additional paid-in capital of
$2,449,424 and $1,696,052, respectively, related to tax benefits associated with
the exercise of non-qualified stock options. In addition, during the first half
ended August 1, 1999 and August 2, 1998, the Company recorded an increase to
additional paid-in capital of $290,354 and $0, respectively, related to the
issuance of stock to satisfy certain deferred compensation liabilities.



                                        5

<PAGE>   6

                       PACIFIC SUNWEAR OF CALIFORNIA, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

        The accompanying consolidated financial statements are unaudited except
for the January 31, 1999 balance sheet. These statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. The consolidated financial statements include the accounts of
Pacific Sunwear of California, Inc. and its wholly-owned subsidiaries (the
"Company"). All significant intercompany transactions have been eliminated in
consolidation.

        The Company's fiscal year is the 52- or 53-week period which ends on the
Sunday closest to the end of January. "Fiscal 1999" is a 52-week period which
ends January 30, 2000.

        In the opinion of management, all adjustments consisting only of normal
recurring entries necessary for a fair presentation have been included. The
preparation of the consolidated financial statements in conformity with
generally accepted accounting principles necessarily requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and reported expenses during the reported
period. Actual results could differ from these estimates. The results of
operations for the second quarter and first half ended August 1, 1999 are not
necessarily indicative of the results that may be expected for the fiscal year
ending January 30, 2000. For further information, refer to the financial
statements and notes thereto as of and for the years ended January 31, 1999,
February 1, 1998 and February 2, 1997.

        Comprehensive Income -- The Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income", in the
first quarter 1998. SFAS No. 130 establishes standards for the reporting and
display of comprehensive income. Components of comprehensive income include net
earnings (loss), foreign currency translation adjustments and gains/losses
associated with investments available for sale. The adoption of SFAS No. 130
required no additional disclosure for the Company and did not have any effect on
the Company's financial position or results of operations.

NOTE 2 - CASH AND CASH EQUIVALENTS

        Cash and cash equivalents include cash on hand and marketable securities
with original maturities of three months or less.

NOTE 3 - NET INCOME PER SHARE, BASIC AND DILUTED

        The following table summarizes the computation of EPS:

SECOND QUARTER ENDED:

<TABLE>
<CAPTION>
                                                    AUGUST 1, 1999                                AUGUST 2, 1998
                                      -----------------------------------------      -----------------------------------------
                                                                      PER SHARE                                      PER SHARE
                                      NET INCOME        SHARES         AMOUNT        NET INCOME        SHARES          AMOUNT
                                      ----------      ----------      ---------      ----------      ----------      ---------
<S>                                   <C>             <C>             <C>            <C>             <C>             <C>
BASIC EPS:

Net Income                            $7,299,904      30,926,234      $    0.24      $4,966,647      31,145,727      $    0.16

DILUTED EPS:

Effect of dilutive stock options                       1,121,951                                      1,294,425

Net Income                            $7,299,904      32,048,185      $    0.23      $4,966,647      32,440,152      $    0.15
</TABLE>



                                       5
<PAGE>   7

FIRST HALF ENDED:

<TABLE>
<CAPTION>
                                                     AUGUST 1, 1999                          AUGUST 2, 1998
                                      -----------------------------------------   ----------------------------------------
                                                                         PER                                        PER
                                                                        SHARE                                      SHARE
                                      NET INCOME         SHARES         AMOUNT    NET INCOME        SHARES         AMOUNT
                                      -----------      ----------      --------   ----------      ----------      --------
<S>                                   <C>              <C>             <C>        <C>             <C>             <C>
BASIC EPS:

Net Income                            $11,342,973      30,829,159      $   0.37   $7,853,561      31,079,381      $   0.25

DILUTED EPS:

Effect of dilutive stock options                        1,125,441                                  1,271,859          0.00

Net Income                            $11,342,973      31,954,600      $   0.36   $7,853,561      32,351,240      $   0.24
</TABLE>

        Options to purchase 72,696 and 779 shares of common stock in the second
quarter of fiscal 1999 and the second quarter of fiscal 1998, respectively, and
71,271 and 55,248 in the first half of fiscal 1999 and the first half of fiscal
1997, respectively, were not included in the computation of diluted earnings per
common share because the option exercise price was greater than the average
market price of the common stock.

        Stock Split - On June 8, 1999, the Company effected a three-for-two
stock split. Earnings per share and share outstanding amounts have been restated
to give retroactive effect to the stock split in these financial statements.

NOTE 4 - FEDERAL AND STATE INCOME TAX EXPENSE

        The combined federal and state income tax expense was calculated using
estimated effective annual tax rates.

NOTE 5 - ACCRUED LIABILITIES

        Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                               AUGUST 1,       JANUARY 31,
                                                                 1999             1999
                                                              -----------      ----------
<S>                                                           <C>              <C>
Accrued compensation and benefits                             $ 4,894,754      $4,546,415
Sales tax payable                                               1,846,079         738,910
Reserve for store expansion/relocation and closing costs        1,149,188       1,322,077
Gift certificates and store merchandise credits                   589,233         969,378
Other accrued liabilities                                       1,548,345       1,114,003
                                                              -----------      ----------
                                                              $10,027,599      $8,690,783
                                                              ===========      ==========
</TABLE>

NOTE 6 - DEFERRED COMPENSATION AND OTHER ASSETS

        Deferred compensation and other assets consist of the following:

<TABLE>
<CAPTION>
                              AUGUST 1,        JANUARY 31,
                                1999              1999
                             ----------        ----------
<S>                          <C>               <C>
Deferred compensation        $4,230,386        $2,807,694
Other assets                    344,359           334,810
                             ----------        ----------
                             $4,574,745        $3,142,504
                             ==========        ==========
</TABLE>



                                       7
<PAGE>   8

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF CONSOLIDATED OPERATIONS

RESULTS OF OPERATIONS

The thirteen weeks ended August 1, 1999 (second quarter) as compared to the
thirteen weeks ended August 2, 1998 (second quarter)

        Net Sales

        Net sales increased to $100.5 million for the second quarter of fiscal
1999 from $73.2 million for the second quarter of fiscal 1998, an increase of
$27.3 million, or 37.3%. Of this $27.3 million increase, $10.9 million was
attributable to net sales generated by new stores opened in fiscal 1998 not yet
included in the comparable store base, $10.5 million was attributable to net
sales generated by 64 new stores opened in fiscal 1999 not yet included in the
comparable store base, $4.8 million was attributable to a 7.1% increase in
comparable store net sales in the second quarter of fiscal 1999 and $1.7 million
was attributable to other non-comparable store sales. Offsetting these increases
was a $.6 million decrease in net sales attributable to the closing of four
stores during fiscal 1998 and one store during fiscal 1999. Other non-comparable
store sales consist of: sales from Pacific Sunwear stores that have been
expanded or relocated and not yet included in the comparable store base, Pacific
Sunwear stores converted to "d.e.m.o." stores and not yet included in the
comparable store base, as well as merchandise sold over the internet. Stores are
deemed comparable stores on the first day of the first month following the one
year anniversary of their opening or expansion/relocation or conversion from
Pacific Sunwear to the d.e.m.o. format. Retail prices of the Company's
merchandise remained relatively unchanged in the second quarter of fiscal 1999
compared to the second quarter of fiscal 1998 and had no significant impact on
the net sales increase for the second quarter of fiscal 1999.

        Gross Margin

        Gross margin, after buying, distribution and occupancy costs, increased
to $34.8 million for the second quarter of fiscal 1999 from $24.6 million for
the second quarter of fiscal 1998, an increase of $10.2 million, or 41.5%. As a
percentage of net sales, gross margin was 34.6% for the second quarter of fiscal
1999 compared to 33.6% for the second quarter of fiscal 1998. Of this 1.0%
increase, net merchandise margins increased .1% as a percentage of net sales for
the second quarter of fiscal 1999 compared to the second quarter of fiscal 1998
and occupancy costs for the second quarter of fiscal 1999 decreased .4% as a
percentage of net sales compared to the second quarter of fiscal 1998, which was
related to higher comparable store net sales and higher total net sales. In
addition, distribution costs decreased .5% as a percentage of net sales compared
to the second quarter of fiscal 1998 as a result of leveraging these expenses
over higher total net sales.

        Selling, General and Administrative Expenses

        Selling, general and administrative expenses increased to $23.1 million
for the second quarter of fiscal 1999 from $16.6 million for the second quarter
of fiscal 1998, an increase of $6.5 million, or 39.2%. As a percentage of net
sales, these expenses increased to 22.9% from 22.7%. Of this .2% net increase as
a percentage of net sales, .3% was due to an increase in advertising as a
percentage of net sales, offset by a decrease in general and administrative
expenses of .1% as a percentage of net sales primarily as a result of leveraging
these expenses over higher total net sales. The Company initiated its first
national print advertising campaign in the first half of fiscal 1999.

        Income Tax Expense

        Income tax expense was $4.6 million for the second quarter of fiscal
1999 compared to $3.2 million for the second quarter of fiscal 1998. The
effective income tax rate was 38.5% for the second quarter of fiscal 1999 as
compared to 39.4% for the second quarter of fiscal 1998. The lower effective
income tax rate for the second quarter of fiscal 1999 was primarily attributable
to a lower weighted effective state income tax rate for the Company. The
weighted effective state income tax rate of the Company will vary depending on a
number of factors, such as differing income tax rates by state and changes in
the weighting formulas primarily caused by the Company's growth by state.



                                       8
<PAGE>   9

The twenty-six weeks ended August 1, 1999 (first half) as compared to the
twenty-six weeks ended August 2, 1998 (first half)

        Net Sales

        Net sales increased to $181.9 million for the first half of fiscal 1999
from $134.4 million for the first half of fiscal 1998, an increase of $47.5
million, or 35.3%. Of this $47.5 million increase, $24.5 million was
attributable to net sales generated by new stores opened in fiscal 1998 not yet
included in the comparable store base, $12.6 million was attributable to net
sales generated by 64 new stores opened in fiscal 1999 not yet included in the
comparable store base, $8.7 million was attributable to a 7.2% increase in
comparable store net sales in the first half of fiscal 1999 and $2.6 million was
attributable to other non-comparable store sales. Offsetting these increases was
a $.9 million decrease in net sales attributable to the closing of four stores
during fiscal 1998 and one store during fiscal 1999. Other non-comparable sales
consist of: sales from Pacific Sunwear stores that have been expanded or
relocated and not yet included in the comparable store base, Pacific Sunwear
stores converted to "d.e.m.o." stores and not yet included in the comparable
store base, as well as merchandise sold over the internet. Stores are deemed
comparable stores on the first day of the first month following the one year
anniversary of their opening or expansion/relocation or conversion from Pacific
Sunwear to the d.e.m.o. format. Retail prices of the Company's merchandise
remained relatively unchanged in the first half of fiscal 1999 compared to the
first half of fiscal 1998 and had no significant impact on the net sales
increase for the first half of fiscal 1999.

        Gross Margin

        Gross margin, after buying, distribution and occupancy costs, increased
to $60.9 million for the first half of fiscal 1999 from $44.2 million for the
first half of fiscal 1998, an increase of $16.7 million, or 37.8%. As a
percentage of net sales, gross margin was 33.5% for the first half of fiscal
1999 compared to 32.9% for the first half of fiscal 1998. Of this .6% increase,
net merchandise margins increased .1% as a percentage of net sales for the first
half of fiscal 1999 compared to the first half of fiscal 1998 and occupancy
costs for the first half of fiscal 1999 decreased .3% as a percentage of net
sales compared to the first half of fiscal 1998, which was related to higher
comparable store net sales and higher total net sales. In addition, distribution
costs decreased .2% as a percentage of net sales compared to the first half of
fiscal 1998 as a result of leveraging these expenses over higher total net
sales.

        Selling, General and Administrative Expenses

        Selling, general and administrative expenses increased to $42.7 million
for the first half of fiscal 1999 from $31.7 million for the first half of
fiscal 1998, an increase of $11.0 million, or 34.7%. As a percentage of net
sales, these expenses decreased to 23.5% from 23.6%. Of this .1% net decrease as
a percentage of net sales, general and administrative expenses decreased by .3%
as a percentage of net sales and store expansion/relocation and closing expenses
decreased by .2% as a percentage of net sales. These decreases as a percentage
of net sales were primarily a result of leveraging these expenses over higher
total net sales. These decreases were offset by an increase in advertising of
 .4% as a percentage of net sales as a result of the Company launching its first
national print advertising campaign in the first half of fiscal 1999.

        Income Tax Expense

        Income tax expense was $7.1 million for the first half of fiscal 1999
compared to $5.1 million for the first half of fiscal 1998. The effective income
tax rate was 38.5% for the first half of fiscal 1999 as compared to 39.5% for
the first half of fiscal 1998. The lower effective income tax rate for the first
half of fiscal 1999 was primarily attributable to a lower weighted effective
state income tax rate for the Company. The weighted effective state income tax
rate of the Company will vary depending on a number of factors, such as
differing income tax rates by state and changes in the weighting formulas
primarily caused by the Company's growth by state.


                                       9
<PAGE>   10

LIQUIDITY AND CAPITAL RESOURCES

        The Company has financed its operations from internally generated cash
flow, short-term borrowings and equity financing. The Company's primary capital
requirements have been for the construction of new stores, remodeling,
expansion, or relocation of selected stores and financing of inventories.

        Net cash provided by operating activities for the first half of fiscal
1999 was $12.2 million compared to $2.6 million for the first half of fiscal
1998. This $9.6 million increase was attributable to an increase in liabilities
for income taxes and deferred income taxes of $4.5 million, an increase in net
income of $3.4 million, an increase in accrued liabilities of $2.7 million, an
increase in depreciation and amortization of $1.9 million and an increase in
accounts payable net of merchandise inventories of $1.9 million. These were
offset by increases in accounts receivable of $2.4 million, an increase in
deferred compensation and other assets of $1.5 million and net increases in
other items netting to $.9 million. Working capital at August 1, 1999 was $48.3
million compared to $47.5 million at January 31, 1999, an increase of $.8
million. Inventories at August 1, 1999 were $64.9 million compared to $42.5
million at January 31, 1999 an increase of $22.4 million. This increase was
primarily related to opening 64 new stores and expanding/relocating nine stores
with in excess of 50% larger average square footage than their previous
locations, as well as a seasonal increase in inventories in all stores. The
Company's average store inventories vary throughout the year and increase in
advance of the peak selling periods of spring break, back-to-school and
Christmas.

        Net cash used in investing activities was $21.2 million for the first
half of fiscal 1999 compared to $5.1 million used for the first half of fiscal
1998. Net cash invested in property and equipment was $21.2 million for the
first half of fiscal 1999 compared to $17.8 million for the first half of fiscal
1998. The increase in capital expenditures was primarily due to an increase in
the number of new stores opened in the first half of fiscal 1999 versus the
first half of fiscal 1998. For the first half of fiscal 1998, the Company had
short term investment maturities of $12.7 million.

        Net cash provided by financing activities for the first half of fiscal
1999 was $2.1 million compared to $.7 million for the first half of fiscal 1998
due to proceeds received from the exercise of stock options.

        The Company has a credit facility with a bank, which expires in August
2000. The credit facility provides for a $25.0 million line of credit, which can
be used for cash advances, commercial letters of credit and shipside bonds.
Interest on cash advances under the line of credit facility is payable monthly
at the bank's prime rate (8.0 % at August 1, 1999). At August 1, 1999, the
Company had $5.3 million in letters of credit outstanding. The loan agreement
subjects the Company to various restrictive covenants, including maintenance of
certain financial ratios and prohibits payment of cash dividends on common
stock. At August 1, 1999, the Company was in compliance with all of the
covenants.

        The Company plans to open approximately 48 new stores, of which 30 will
be Pacific Sunwear stores, 11 will be Pacific Sunwear Outlet stores and seven
will be d.e.m.o. stores during the remainder of fiscal 1999. The Company also
plans to expand or relocate six existing smaller Pacific Sunwear stores during
the remainder of fiscal 1999. The Company estimates that capital expenditures
during the remainder of fiscal 1999 will be approximately $14 million. The
Company plans to open 125 new stores in the year 2000, of which 40 will be
d.e.m.o. stores.

        The Company reviews the operating performance of its stores on an
ongoing basis to determine which stores, if any, to close and records closing
costs as stores are closed or identified to be closed. The Company closed one
store in the first half of fiscal 1999. The Company anticipates closing two
additional stores in the second half of fiscal 1999.

        Management believes that the Company's working capital, bank line of
credit and cash flows from operating activities will be sufficient to meet the
Company's operating and capital expenditure requirements through the end of
fiscal 2000.



                                       10
<PAGE>   11

INFLATION

        The Company does not believe that inflation has had a material effect on
the results of operations during the past three years. There can be no assurance
that the Company's business will not be affected by inflation in the future.

NEW ACCOUNTING PRONOUNCEMENTS

        Accounting for Derivatives and Hedging Activities -- In June 1998, the
FASB issued SFAS No. 133, "Accounting for Derivatives and Hedging Activities"
(SFAS 133). SFAS 133 must be implemented by the Company in fiscal 2000. SFAS 133
is not expected to have a significant impact on the Company's consolidated
financial statements.

SEASONALITY AND QUARTERLY RESULTS

        The Company's business is seasonal by nature, with the Christmas and
back-to-school periods historically accounting for the largest percentage of
annual net sales. The Company's first quarter historically accounts for the
smallest percentage of annual net sales. In fiscal 1998 and fiscal 1997,
excluding sales generated by new and relocated/expanded stores, the Christmas
and back-to-school periods together accounted for approximately 34% and 35%,
respectively, of the Company's annual net sales and a higher percentage of the
Company's operating income. In fiscal 1998, excluding net sales generated by new
and relocated/expanded stores, approximately 45% of the Company's annual net
sales occurred in the first half of the fiscal year and 55% in the second half.
The Company's quarterly results of operations may also fluctuate significantly
as a result of a variety of factors, including the timing of store openings; the
amount of revenue contributed by new stores; the timing and level of markdowns;
the timing of store closings, expansions and relocations; competitive factors;
and general economic conditions.

YEAR 2000 READINESS

        The Company has completed a year 2000 review of its information
technology and non-information technology systems in preparation for the year
2000.

        The Company's material merchandise, financial and store computer
software systems are provided by third-party vendors and are used with minor
modifications by the Company. The software vendors have provided updated
software versions as part of the normal periodic software upgrade process that
address the year 2000 issue. This upgrade process has been substantially
completed as of the end of fiscal 1998 and did not cost the Company additional
amounts beyond normal recurring annual software maintenance fees paid by the
Company. While the Company will incur internal staff costs as well as certain
outside consulting and other expenditures related to its year 2000 readiness
efforts, the total incremental expenses are not expected to have a material
impact on the Company's financial condition or results of operations. As of
August 1, 1999, the Company had incurred less than $200,000 in expenses relating
to its year 2000 readiness efforts. The source of funds for these expenses has
been the Company's working capital, and the Company anticipates that it will
fund its additional year 2000 expenses from its working capital.

        The Company's most significant software system includes purchase order
management, open order reporting, open-to-buy, receiving, distribution, basic
stock replenishment, inter-store transfers, inventory and price management,
general ledger and accounts payable functions. This system has been upgraded and
has been certified by the software vendor as year 2000 compliant. In addition,
the Company successfully completed a fully-integrated year 2000 readiness test
of this system at an off-site recovery computer center in August of fiscal
1999. At its new distribution center, the Company uses a recently installed
materials handling system and the vendor of this system has advised the Company
that the system is year 2000 compliant.

        With regard to the Company's vendors, the Company has contacted its
significant merchandise vendors regarding their state of year 2000 readiness and
these vendors have advised the Company that they expect to be ready for the year
2000. None of these vendors accounted for more than 9% of the Company's net
sales in fiscal 1998 or during the first half of fiscal 1999. The Company also
uses numerous third-party vendors to provide other goods and services, as well
as office, distribution center and other supplies to the Company and its stores.
The Company has contacted its significant goods and services vendors regarding
their state of year 2000 readiness and these vendors have advised the Company
that they expect to be ready for the year 2000. There is no assurance that the
systems of the vendors from whom the Company receives merchandise, goods and
services will be year 2000 ready or that any failure on their part to be year
2000 ready would not have an adverse impact on the Company if a number of such



                                       11
<PAGE>   12

vendors fail to be year 2000 ready on a timely basis.

        The year 2000 issue presents a number of risks and uncertainties that
could impact the Company, from the failure of one or several of the Company's
significant vendors to timely fill the Company's merchandise orders to public
utility failures affecting the Company's retail stores. The Company is currently
analyzing these risks and uncertainties and has begun to develop contingency
plans to address material risks related to the year 2000 issues. These
contingency plans include the following:

        January 1, 2000 falls on a Saturday, when the Company's distribution
center and corporate offices are normally closed. The contingency plans include
operating the distribution center and corporate office systems on January 1 in
order to quickly address any year 2000 issues that may arise.

        The Company's shipment of merchandise to its stores is traditionally at
a low point during the time frame surrounding the immediate beginning of the new
year due to the fact that the stores are primarily engaged in the promotional
selldown of inventories after the holiday season. The Company plans to monitor
merchandise shipments from vendors during the weeks immediately following
January 1, 2000, and survey its vendors to determine if they are encountering
year 2000 issues that may prevent them from delivering future shipments of
merchandise on a timely basis. Contingency plans include processing substitute
orders with vendors that do not have year 2000 issues.

        The Company intends to open its stores for business on January 1, 2000.
Contingency plans for the Company's stores include: (i) all stores will report
to the corporate office during the morning of January 1, 2000 whether they are
open and operating normally, or if they have encountered problems, (ii) a
procedure to rank year 2000 issues reported by stores in order of importance,
using the ability of the store to conduct business and process sales as the
primary criteria, (iii) the Company's staff of information systems personnel
will be on hand and available to work on any year 2000 issues on January 1, 2000
and (iv) the use of existing manual sales processing procedures in any affected
stores until such time as any year 2000 issues are fixed.

        While the Company continues to believe the year 2000 issues described
above will not materially affect its financial position or results of
operations, it remains uncertain as to what extent, if any, the Company may be
impacted.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS

        This report on Form 10-Q contains "forward-looking statements" within
the meaning of Sections 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, and the Company intends that such
forward-looking statements be subject to the safe harbors created thereby. The
Company is hereby providing cautionary statements identifying important factors
that could cause the Company's actual results to differ materially from those
projected in forward-looking statements of the Company herein. Any statements
that express, or involve discussions as to expectations, beliefs, plans,
objectives, assumptions, future events or performance (often, but not always
through the use of words or phrases such as "will result," "expects to," "will
continue," "anticipates," "plans," "intends," "estimated," "projects" and
"outlook") are not historical facts and may be forward-looking and, accordingly,
such statements involve estimates, assumptions and uncertainties which could
cause actual results to differ materially from those expressed in the
forward-looking statements. Such uncertainties include, among others, the
following factors:

        FLUCTUATIONS IN COMPARABLE STORE NET SALES RESULTS. The Company's
comparable store net sales results have fluctuated significantly in the past, on
a monthly, quarterly and annual basis, and are expected to continue to fluctuate
in the future. A variety of factors affect the Company's comparable store net
sales results, including changes in fashion trends, changes in the Company's
merchandise mix, calendar shifts of holiday periods, actions by competitors,
weather conditions and general economic conditions. The Company's comparable
store net sales results for any particular fiscal month, fiscal quarter or
fiscal year in the future may decrease. As a result of these or other factors
the Company's future comparable store net sales results are likely to have a
significant effect on the market price of the Company's common stock.

        RISKS OF NEW SPECIALTY STORE CONCEPT NAMED "d.e.m.o.". The Company's
ability to expand into new concepts has not been fully tested. The Company
opened the first d.e.m.o. store in April of fiscal 1998, and at the end of the
first half of fiscal 1999 operated 33 d.e.m.o. stores. Accordingly, the
operation of its d.e.m.o. stores is subject to numerous risks, including
unanticipated operating problems, lack of experience, lack of customer
acceptance, new vendor relationships and competition from existing and new
retailers. There can be no assurance



                                       12
<PAGE>   13

that the Company's d.e.m.o. stores will achieve sales and profitability levels
that justify the Company's investment in this new retail format. Expansion of
the d.e.m.o. format also involves other risks that could have a material adverse
effect on the Company, including (i) the diversion of management's attention
from the Company's core business, (ii) difficulties with the hiring, retention
and training of key personnel for the d.e.m.o. stores, (iii) risks associated
with new vendors and (iv) difficulties with locating and obtaining favorable
store sites and negotiating acceptable lease terms.

        INTERNET SALES. The Company began selling merchandise over the internet
in June 1999. The Company's internet operations involve, among other things,
internet web site design activities, investment in new systems, distribution
center enhancements, training of personnel and hiring of additional personnel to
handle new functions. The Company's internet operations are subject to numerous
risks, including unanticipated operating problems, reliance on third party
computer hardware and software providers, higher than expected volumes of
traffic on the web site that could lead to system failures and the need to
invest in additional computer systems to support the traffic, lack of experience
in managing the new internet business, lack of customer acceptance and lack of
experience in the fulfillment and shipping of individual orders to customers.
There can be no assurance that the Company's internet operations will achieve
sales and profitability levels that justify the Company's investment therein.
The Company's internet operations also involve other risks that could have a
material adverse effect on the Company, including (i) the diversion of
management's attention from the Company's core business, (ii) the failure to
reach profitability within the foreseeable future, (iii) difficulties with
hiring, retention and training of key personnel to conduct the Company's
internet operations, (iv) diversion of sales from Pacific Sunwear stores, (v)
rapid technological change, (vi) liability for online content and (vii) risks
related to the failure of the computer systems that operate the web site and its
related support systems, including computer viruses, telecommunication failures
and electronic break-ins and similar disruptions. In addition, the Company's
internet operations involves risks which are beyond the Company's control that
could have a material adverse effect on the Company, including (i) price
competition involving the items the Company intends to sell, (ii) the entry of
the Company's vendors into the internet business, in direct competition with the
Company, (iii) the level of merchandise returns experienced by the Company, (iv)
governmental regulation, (v) online security breaches, (vi) credit card fraud,
(vii) general economic conditions and economic conditions specific to the
internet, online commerce and the apparel industry and (viii) competition from
other internet web sites that may have significantly more capital resources and
experience in internet sales than the Company.

        EXPANSION AND MANAGEMENT OF GROWTH. Pacific Sunwear's continued growth
depends to a significant degree on its ability to open and operate stores on a
profitable basis and on management's ability to manage the Company's planned
expansion. During the remainder of fiscal 1999, the Company plans to open
approximately 48 new stores, of which 30 will be Pacific Sunwear stores, eleven
will be Pacific Sunwear Outlet stores and seven will be d.e.m.o. stores. The
Company also plans to expand or relocate six existing smaller Pacific Sunwear
stores during the remainder of fiscal 1999. The Company plans to open 125 new
stores in the year 2000, of which 40 will be d.e.m.o. stores. The Company's
planned expansion is dependant upon a number of factors, including the ability
of the Company to locate and obtain favorable store sites, negotiate acceptable
lease terms, obtain adequate merchandise supply and hire and train qualified
management level and other employees. Factors beyond the Company's control may
also affect the Company's ability to expand, including general economic and
business conditions affecting consumer spending. There can be no assurance that
the Company will achieve its planned expansion or that such expansion will be
profitable. As the Company's operations continue to grow, there could be
increasing strain on the Company's resources, and the Company could experience
difficulties relating to a variety of operational matters, including hiring,
training and managing an increasing number of employees, having sufficient
working capital, bank line of credit and cash flow from operating activities for
the Company's future operating and capital requirements, obtaining sufficient
quantities of merchandise from its preferred vendors, obtaining sufficient
materials and contract manufacturers to produce its private brand products and
enhancing its distribution, financial and operating systems. There can be no
assurance that the Company will be able to manage its growth effectively. Any
failure to manage growth could have a material adverse effect on the Company's
business, financial condition and results of operations.

        MERCHANDISING/FASHION SENSITIVITY. The Company's success is largely
dependent upon its ability to gauge the fashion tastes of its customers and to
provide merchandise that satisfies customer demand in a timely manner. The
Company's failure to anticipate, identify or react appropriately in a timely
manner to changes in fashion trends could have a material adverse effect on the
Company's business, financial condition and results of operations. Misjudgements
or unanticipated fashion misjudgements could have a material adverse effect on
the Company's image with its customers.

        PRIVATE BRAND MERCHANDISE. Sales from private brand merchandise
accounted for approximately 36% and



                                       13
<PAGE>   14

38% of net sales in fiscal 1998 and fiscal 1997, respectively. Because the
Company's private brand merchandise generally carries higher merchandise margins
than its other merchandise, the Company's failure to anticipate, identify and
react in a timely manner to fashion trends with its private brand merchandise,
particularly if the percentage of net sales derived from private brand
merchandise increases, may have a material adverse affect on the Company's
business, financial condition and results of operations.

        RELIANCE ON KEY PERSONNEL. The continued success of the Company is
dependant to a significant degree upon the services of its key personnel,
particularly its executive officers. The loss of the services of any member of
senior management could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company's success
in the future will also be dependent upon the Company's ability to attract and
retain qualified personnel. The Company's inability to attract and retain
qualified personnel in the future could have a material adverse effect on the
Company's business, financial condition and results of operations.

        DEPENDANCE ON SINGLE DISTRIBUTION FACILITY. The Company's distribution
functions for all of its stores are handled from a single facility in Anaheim,
California. In addition, the Company processes shipments related to sales of
merchandise over the internet from the same facility. Any significant
interruption in the operation of the distribution facility due to natural
disasters, accidents, system failures arising from the year 2000 issue or
otherwise, would have a material adverse effect on the Company's business,
financial condition and results of operations.

        YEAR 2000 READINESS AND CONTINGENCY PLAN. There can be no assurance that
a failure in the Company's information and non-information technology systems
due to the year 2000 will not occur. Any significant failure due to the year
2000 could have a material adverse effect on the Company's business, financial
condition and results of operations. Examples of failures due to the year 2000
include, among others: (i) failures of one or several of the Company's
significant vendors to timely fill the Company's merchandise orders, (ii) public
utility failures that prevent some of the Company's stores from opening for
normal business hours, the Company's distribution center from handling
distribution functions, and/or the Company's corporate office from conducting
normal business, (iii) failures in the banking system, including the processing
of charge card, check and debit card transactions and (iv) other unforeseen
failures in the national infrastructure that the Company depends upon to conduct
its business.

        VOLATILITY OF STOCK PRICE. The market price of the Company's common
stock has fluctuated substantially in the past and there can be no assurance
that the market price of the Common Stock will not continue to fluctuate
significantly. Future announcements or management discussions concerning the
Company or its competitors, internet sales results, d.e.m.o. sales and
profitability results, variations in operating results or comparable store net
sales, changes in earnings estimates by analysts or changes in accounting
policies, among other factors, could cause the market price of the common stock
to fluctuate substantially. For example, in December 1998 the Company's stock
price decreased dramatically after a decrease in the Company's comparable store
net sales for the month of November 1998 was reported. In addition, stock
markets have experienced extreme price and volume volatility in recent years.
This volatility has had a substantial effect on the market prices of securities
of many small public companies for reason frequently unrelated to the operating
performance of the specific companies.

                                  *************

        The Company cautions that the risk factors described above could cause
actual results or outcomes to differ materially from those expressed in any
forward-looking statements of the Company made by or on behalf of the Company.
Further, management cannot assess the impact of each such factor on the
Company's business or the extent to which any factor, or combination of factors,
may cause actual results to differ materially from those contained in any
forward-looking statements.

        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company is exposed to market risk related to changes in interest
rates. A discussion of the Company's accounting policies for financial
instruments and further disclosures relating to financial instruments is
included in the Summary of Significant Accounting Policies and Nature of
Business in the Notes to Consolidated Financial Statements in the Company's Form
10-K for the year ended January 31, 1999. The Company monitors the risks
associated with interest rates and financial instrument positions.



                                       14
<PAGE>   15

                            PART II-OTHER INFORMATION

Item 1 - Legal Proceedings - Not Applicable

Item 2 - Changes in Securities and Use of Proceeds - Not Applicable

Item 3 - Defaults Upon Senior Securities - Not Applicable

Item 4 - Submission of Matters to a Vote of Security Holders

a) The 1999 Annual Meeting of the Shareholders of the Company was held on May
26, 1999.

b) At the 1999 Annual Meeting, Peter L. Harris, Sally Frame Kasaks and Richard
Lyons were elected as Directors of the Company for a one year term ending in
2000 and Greg H. Weaver, Julius Jensen III and Pearson C. Cummin III were
elected as Directors of the Company for a two year term ending in 2001.

c) In addition to the election of directors, the shareholders voted on and
approved the Pacific Sunwear of California, Inc. 1999 Stock Award Plan.

Voting at the 1999 Annual Meeting for the election of directors was as set forth
below. Each of the nominees identified below was elected a director.

<TABLE>
<CAPTION>
---------------------------------------------------------------
                                VOTES CAST              VOTES
        NAME                       FOR                 WITHHELD
---------------------------------------------------------------
<S>                             <C>                     <C>
Peter L. Harris                 14,818,751              75,333
Sally Frame Kasaks              14,818,751              75,333
Richard Lyons                   14,818,751              75,333
Greg H. Weaver                  14,818,751              75,333
Julius Jensen III               14,818,751              75,333
Pearson C. Cummin III           14,818,751              75,333
---------------------------------------------------------------
</TABLE>

With respect to the approval of the Pacific Sunwear of California, Inc. 1999
Stock Award Plan, 11,846,592 votes were cast for approval, 815,908 votes were
cast against, 18,304 votes abstained and there were 2,213,280 broker non-votes.

Item 5 - Other Information - Not Applicable

Item 6 - Exhibits and Reports on Form 8-K

        (a)     Exhibits:

                (27)    Financial Data Schedule

                (10.20) Severance Agreement, dated June 21, 1999, by and between
                        Pacific Sunwear of California Inc. and Mark A. Hoffman

                (10.21) Severance Agreement, dated August 2, 1999, by and
                        between Pacific Sunwear of California Inc. and Michael
                        Scandiffio

        (b)     Reports on Form 8-K:

        No reports were filed on form 8-K during the quarter for which this
report is filed.



                                       15
<PAGE>   16

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        Pacific Sunwear of California, Inc.
                                        (Registrant)

Date: September 3, 1999                 \s\ GREG H. WEAVER
                                        ----------------------------------------
                                        Greg H. Weaver
                                        Chairman of the Board
                                        and Chief Executive Officer

Date: September 3, 1999                 \s\CARL W. WOMACK
                                        ----------------------------------------
                                        Carl W. Womack
                                        Senior Vice President, Chief
                                        Financial Officer and Secretary



                                       16
<PAGE>   17

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
  Exhibit
     No.                          Description
  -------                         -----------
<S>           <C>
  (27)        Financial Data Schedule

  (10.20)     Severance Agreement, dated June 21, 1999, by and between
              Pacific Sunwear of California Inc. and Mark A. Hoffman

  (10.21)     Severance Agreement, dated August 2, 1999, by and
              between Pacific Sunwear of California Inc. and Michael
              Scandiffio
</TABLE>