Wet Seal Cites ‘Disappointing Start’ to QuarterThursday, March 22, 2012
Weak sales of tops following the holiday selling season has Foothill Ranch-based mall retailer Wet Seal Inc. off to a “disappointing start” to its April quarter, according to Chief Executive Susan McGalla.
The company issued lower-than-expected guidance for the quarter, with profit estimated between $2.2 million and $4.4 million.
Wall Street analysts on average had been estimating a profit of $5.5 million for the period.
Revenue for the current quarter is expected to be between $148 million to $150 million.
Analysts expected $153.7 million.
Wet Seal operates 472 stores under its namesake division for teen girls. The company also has an 86-store chain called Arden B geared to young women.
The current quarter guidance followed Wet Seal’s results for the three months through January.
Profit was in line with analyst expectations of $2.6 million, excluding taxes. That’s down about 60% from a year earlier.
Revenue for the January quarter was down 1.4% from the year-ago period to $163.2 million.
Analysts expected sales of $165.5 million.
Sales of stores open at least a year fell 5.5% during the January quarter.
Both chains reported same-store declines for the January quarter, but Arden B took the bigger plunge, with an 11% drop.
Sales at Wet Seal were strong in the jean, bottoms and casual clothing business and “we are aggressively course correcting our tops business to improve our top line sales trends,” McGalla said in a statement. “At Arden B, among other things, we are focused on near-term opportunities in the bottoms category that, combined with our tops assortment, are beginning to provide more compelling outfitting solutions for our customer.”