Wet Seal Narrows Q2 Loss, Looks to Store GrowthTuesday, August 27, 2013
Results for Wet Seal Inc.’s August quarter show continued improvement in the company’s business.
The Foothill Ranch-based company operates the 464-store Wet Seal chain for teens and the 61-store Arden B for young women.
The company posted adjusted net income for the August quarter of $1.2 million, in-line with consensus estimates.
Net sales for the recently ended quarter rose about 1% from the year-ago period to $137.2 million. That’s about on par with Wall Street estimates of $137.88 million for the quarter.
Companywide same-store sales rose 3.7% during the quarter, led by a 3.9% gain in the Wet Seal division. Arden B saw same-store sales rise 2%.
Wet Seal shares were up about 9% in after-hours trading Tuesday, to a market value of about $380 million.
"As we look at the second half of the year, we're encouraged by how the business is positioned from both a financial and operational perspective,” said Chief Executive John Goodman in a statement. “Our product and merchandising initiatives are resonating with customers, and we believe these core strategies, along with new marketing programs and partnerships planned for back-to-school and holiday, will enable us to drive continued growth at both Wet Seal and Arden B.”
Wet Seal said it expects a net loss between $1.72 million and $2.58 million in the current quarter, compared with $14.62 million loss in the year-ago period.
The company expects net sales for the October quarter to be between $135 million to $138 million and same-store sales growth in the mid-single digits.
Retailers have posted mixed second-quarter results for the second quarter, highlighting challenges such as weak foot traffic and heavy discounting during the back-to-school selling season.
Teen retailers’ shares in particular have been on a rollercoaster ride over the course of the latest earnings releases, hit hard on disappointing results from Pittsburgh-based American Eagle Outfitters Inc. and Abercrombie & Fitch Co. of Ohio.
Meantime, Philadelphia-based Urban Outfitters Inc.—whose namesake chain is geared to teens—posted better-than-expected results earlier this month.
Irvine-based Tilly’s Inc. and Pacific Sunwear of California Inc. are expected to second-quarter results this week.