Breaking News
FONT-SIZE Plus   Neg
Share SHARE

Wet Seal Loss Widens, Outlook Weak; Stock Down - Update

RELATED NEWS
Trade WTSL now with 

Wet Seal Inc (WTSL: Quote), a specialty apparel retailer for women, Tuesday reported a slip to loss in the first quarter, hurt mainly by weak sales and margins. While the loss was lower than what Wall Street estimated, sales fell short of expectations.

Moving forward, Wet Seal provided a weak outlook for the second quarter, dragging its shares down nine percent in after-hours trade on the Nasdaq.

Chief Executive John Goodman said the results were impacted by factors that have for the past months been a bane for retailers - soft mall traffic, elevated promotional activity and disruptive weather. "Our performance trend improved during the last month of the quarter and was highlighted by a strong Easter week," Goodman added.

Wet Seal reported first-quarter net loss of $21.8 million or $0.26 per share compared with net earnings of $3.1 million or $0.03 per share last year.

Excluding items, adjusted loss for the quarter was $15.1 million or $0.18 per share compared with earnings of $1.3 million or $0.01 per share a year ago.

On average, five analysts polled by Thomson Reuters estimated a loss of $0.18 per share for the quarter. Analysts' estimates typically exclude special items.

The company, which operates 532 stores, said sales for the quarter were lower at $116.7 million compared with $140.4 million in the prior year. Analysts estimated sales of $117.46 million for the quarter.

On a same store basis, revenues for the quarter declined 16.9 percent, including a decline of 16.5 percent at Wet Seal and 19.4 percent at Arden B, the company said.

Results were also impacted by a decline in gross margin to 19.8 percent from 30.1 percent last year.

Looking ahead to the second quarter, the Foothill Ranch, California-based company expects adjusted loss of $0.12 to $0.09 per share, while analysts currently project a loss of $0.04 per share.

Wet Seal expects same store sales to decline 8 percent to 11 percent for the quarter.

Meanwhile, the company expects to complete the planned conversion of 54 Arden B store locations to Wet Seal and Wet Seal Plus merchandise by the end of the second quarter.

Wet Seal stock closed Tuesday at $1.01, up about $0.06 or 5.96%, on a volume of 1.5 million shares on the Nasdaq. In after hours, the stock dropped $0.09 or 8.91%.

Register
To receive FREE breaking news email alerts for WET SEAL INC and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Denis Mukwege, a doctor from the Democratic Republic of Congo, has won this year's Sakharov Prize for Freedom of Thought for helping thousands of gang rape victims in the country. The award was instituted by the European Parliament, and the laureate for 2014 was selected by EP President Martin Schulz and the political group leaders. Announcing Europe's top human rights prize Tuesday, Schulz said Stocks moved sharply higher over the course of the trading day on Tuesday, extending the recovery from the sell-off seen in recent weeks. The Nasdaq and the S&P 500 closed higher for the fourth consecutive session but remain well off their mid-September highs. Despite indications that the spread of Ebola inside the U.S. has been contained, the results of a new Gallup poll show the deadly disease had made its debut on a list of the top 10 most important problems facing the country.
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.