Foothill Ranch-based mall retailer Wet Seal Inc. said Thursday it expects a profit short of Wall Street expectations for the current quarter as well as a decline in sales at stores open at least a year.
The news sent shares of Wet Seal down 3% in early New York trading on a market value of $210 million.
Wet Seal, which runs mall stores selling clothes for teen girls and young women, said it expects a profit of $2.7 million to $5.4 million for the quarter through January, versus a loss of $6.3 million in the year-ago quarter.
Analysts on average had expected a profit of $4.5 million for the current quarter.
Wet Seal forecasts quarterly sales of $168 million to $171 million, versus $166.4 million in sales in the year-ago quarter.
Same-store sales, which measure growth at stores open at least a year, are expected to decline 4% to 6% in the quarter, the company said.
The poor forecast for the critical holiday quarter shows that Wet Seal continues to wrestle with finding the right mix of clothes and with competition from other retailers.
“We continue to monitor inventory levels carefully as we expect the retail environment to remain highly competitive during the holiday season,” Chief Executive Ed Thomas said.
The company, which spiraled earlier this decade, has seen its turnaround of the past few years fade in 2007.
For the three months ended Nov. 3, Wet Seal reported a loss driven by a one-time charge and weak sales.
The company lost $3.3 million in the recently ended quarter, versus a profit of $2.4 million a year earlier.
Without a $1.6 million asset impairment charge, Wet Seal lost $1.8 million.
Sales for the quarter rose 5% to $150.3 million, helped by store openings. Sales at stores open at least a year fell 3.4%.
The company said it plans to slow its rollout of stores from a 2007 rate of 15% to about 5% next year.
