Wet Seal Shares Up on Better-Than-Expected SalesThursday, November 1, 2012
Foothill Ranch-based Wet Seal Inc.’s shares were up 5% in midday trading Thursday after the teen and contemporary retailer reported better-than- expected October same-store sales.
Wet Seal had a recent market value of $268 million.
The company operates 472 Wet Seal stores for teen girls and 81 Arden B stores for young women.
The company reported an overall same-store sales decline of 7.6% in October, narrowed from a 12.7% drop in September and an 18.3% fall in August.
The month’s results beat analyst expectations of a 10.7% fall in same-store sales.
“Our October comparable store sales were in line with expectations as adjustments to the assortment contributed to sequential improvement in sales trends,” the company said in a statement.
The overall decline was led by an 11.5% slide at Arden B, while the Wet Seal division saw same-store sales down 6.9%.
Overall sales for October were $38.5 million, down 5.1%.
Wet Seal switched back to a fast-fashion merchandising strategy in July, following the firing of former Chief Executive Susan McGalla. The company has stuck by that plan since then, even as it faced a proxy battle with a major shareholder and the departure of four board members, including its chair, last month.
“We remain on track to clear our older inventory by early to mid-fourth quarter,” the company said in its statement. “In addition, we believe the merchandise assortment planned for this time period will align with the tastes of our long-time customer base.”
Wet Seal updated its third-quarter guidance and now expects a loss of $11.5 million for the period. Original guidance projected a loss between $11.5 million to $14.2 million.