Foothill Ranch-based mall retailer Wet Seal Inc. reported a quarterly profit that beat expectations Thursday and offered an outlook for the current quarter in line with Wall Street expectations.
For the three months through January, Wet Seal said it earned $9.6 million excluding one-time items, better than the $7.5 million analysts were expecting on average.
Sales at the company, which runs clothing stores for teen girls and young women, were $154.9 million, down 14% from a year earlier and just shy of the $155.2 million analysts expected.
Like other retailers, Wet Seal is dealing with the industry’s worst downturn in recent memory as shoppers cut back purchases during the recession.
For the three months through April, Wet Seal said it expects a profit of $2 million to $6 million. Analysts on average had been expecting a profit of $5 million.
Sales are seen coming in at $131.2 million to $137.5 million.
Analysts were expecting $135.1 million in sales.
Wet Seal’s shares were down more than 5% in afterhours trading on a market value of nearly $340 million.
Investors could have been spooked by the company’s forecast of a gross profit margin of 28.3% to 30.8% of sales, down from 32.8% a year earlier due to weak sales and markdowns to get rid of unsold clothes.
In regular trading Thursday, Wet Seal shares closed up more than 10%.
Sales at stores open at least a year fell 13.4% during the recently ended quarter.
For the 12 months through next January, Wet Seal said it expects its number of stores to be flat at 496.
The company plans to open 20 stores for its flagship Wet Seal chain for teen girls and close roughly the same number of stores at Wet Seal and Arden B, which sells clothes for young women.
