Wet Seal Shares Slump on January SalesThursday, February 2, 2012
Shares of Foothill Ranch-based teen retailer Wet Seal Inc. fell 8% in New York midday trading after the company reported disappointing January store sales.
The company reported an overall 13% decline in January sales of stores open at least a year.
Analysts had expected a 3% dip.
Wet seal operates 472 stores under its namesake division for teens along with an 86-store Arden B chain geared to young women.
“The fourth quarter ended with January sales that did not meet our expectations,” said Chief Executive Susan McGalla in a statement. “Although January is the smallest sales month of the quarter, this led to lower fourth-quarter comparable store sales than our previous estimate.”
Weak sales of the Wet Seal division’s initial set of spring tops were partially to blame for the January drop. The chain’s denim and bottoms business did well throughout the month, according to the retailer.
“We are encouraged by the quality of upcoming spring assortment deliveries,” McGalla said. “However, our light apparel unit levels, and related sales challenge, will persist until we build inventory over the course of February.”
The Arden B chain saw January sales fall 12.7% with weaknesses in all major categories cited for the monthly decline.
The disappointing January results prompted Wet Seal to adjust its profit outlook for the three months through January to $2.8 million, excluding charges. That’s on the low end of the company’s previous profit outlook range of $2.8 million to $4.6 million for the January quarter.