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Foothill Ranch-based teen and contemporary retailer Wet Seal Inc. lowered its guidance for the current quarter as retailers ramp up promotions going into the holiday selling season to boost slower sales.
"Following our strong start to the quarter, mall traffic softened considerably during September and has continued into October, resulting in an increasingly promotional competitive environment in recent weeks,” Chief Executive John Goodman said in a statement. “We expect to deliver improvement in most key financial metrics versus the year ago period, but the need to implement more extensive promotions than planned has caused us to lower our margin and earnings expectations for the quarter.”
Wet Seal said it expects same-store sales growth for the quarter ending Nov. 2 to be in the low-single digits.
That compares with previous guidance of a comparable sales increase in the mid-single digits.
Wet Seal now expects a net loss for the November quarter of $8.6 million to $10.3 million.
That's widened from a previously projected net loss between $1.72 million and $2.58 million.
Wet Seal is expected to report its quarterly results Nov. 25.
The company's shares were flat in extended trading Tuesday and had a recent market value of $325.33 million.
A number of retailers have used discounts to boost traffic into their stores in an attempt to push through inventory before the start of the critical holiday selling season.
Washington D.C.-based National Retail Federation expects U.S. sales in November and December to grow by 3.9% to $602.1 billion this year.