Wet Seal Beats Wall Street Expectations on June SalesThursday, July 7, 2011
Shares of Foothill Ranch-based Wet Seal Inc. rose after the company reported higher than expected June sales.
Shares of the mall retailer were up as much as 6% in midday trading to a market value of $504.1 million.
Wet Seal, which sells clothes and accessories for teens and young women, reported June sales at stores open at least a year up 7.3%.
Analysts had on average expected a 1.9% increase.
Wet Seal counts 542 stores nationwide.
The company's Wet Seal chain geared to teen girls accounts for 460 of those stores.
Wet Seal led the same-store sales increase last month with a 7.5% increase.
The company's Arden B. division, which sells clothes to young women, saw sales up 6.6%.
Both divisions had posted same-store sale declines a year earlier.
“We are encouraged by these consistent results as we near the important back-to-school selling season,” said Wet Seal Chief Executive Susan McGalla in a statement.
Online sales, which the company does not count in its same-store results, fell 17% as the company looks to lighten sales and other promotions offered through its web store.
“We are focused on strategies to drive a higher penetration of full-price selling online and better align merchandising in this channel with our stores,” McGalla said. “This may continue to put pressure on our e-commerce sales in the near term.”
Wet Seal reiterated its guidance for the three months through July forecasting a profit of $1 million to $2 million.
Analysts on average expect a profit of $2 million.