Thursday, The Wet Seal, Inc. (WTSLA), a specialty retailer, said its second quarter profit decreased from a year ago, on lower revenues and charges. Looking ahead, the company provided its guidance for the third quarter.
The company recorded net income of $3.1 million, or $0.03 per share, as compared to $10.1 million, or $0.10 per share, in the prior year quarter. Excluding the effect of interest charges, net income in the prior year quarter was $12.0 million or $0.12 per share.
On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.
The current quarter included $1.6 million in non-cash asset impairment charges and $1.2 million of benefits resulting from a change in estimated breakage for unredeemed gift cards, gift certificates and store credits.
The prior year quarter included $0.3 million in non-cash asset impairment charges and $1.9 million in non-cash interest charges associated with a June 2008 conversion of $3.4 million of the company's secured convertible notes into class A common stock.
Net sales for the quarter were $136.4 million, compared to net sales of $149.1 million in the prior year second quarter. Consolidated comparable store sales decreased 10.6%. Seven Wall Street analysts expected revenues of $136.06 million for the quarter.
During the second quarter, the company incurred capital expenditures of $6.6 million, of which $6.0 million was for construction of new stores and remodels of existing stores.
For the six-month period, net income was $8.13 million or $0.08 per share, down from $19.08 million or $0.19 per share a year ago.
Net sales for the period declined to $268.38 million from $291.45 million last year.
For the third quarter of fiscal 2009, the company expects earnings in the range of $0.02 to $0.05 per share. The guidance is based on the assumption fo total net sales between $138 million and $142 million, compared to $146.6 million in the third quarter of fiscal 2008.
The Street currently anticipates earnings of $0.06 per share for the quarter, on revenues of $140.67 million.
Comparable store sales decline for the quarter is expected between 6% and 9%, compared to a 7.6% decrease in the prior year third quarter.
Gross margin is anticipated in the range of 27.9% and 29.7% of net sales, compared to 31.3% in the prior year third quarter.
WTSLA closed Thursday's regular trading at $3.32, up $0.05 or 1.53%, on a volume of 1.09 million shares on the Nasdaq. In after hours, the stock declined $0.22 or 6.63%, trading at $3.10 .
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