Foothill Ranch-based mall retailer Wet Seal Inc. reported a smaller than expected decline in September sales at stores opened at least a year and reaffirmed its quarterly outlook on Thursday.
Wet Seal, which runs stores selling clothes for teen girls and young women, said same-store sales fell 4.5% last month, better than the 7.6% drop analysts were expecting.
The result was in line with a national trend that saw several retailers post lower September same-store sales that still managed to beat Wall Street expectations.
For many, September was the best month so far in 2009.
Same-store sales at the company’s dominant Wet Seal chain for teen girls fell 5.3% last month. The company’s Arden B. chain for young women saw a 1.1% decline.
“As we expected, early September comparable store sales benefited from Labor Day shifting one week later this year versus last year, which resulted in a similar one-week shift in back-to-school shopping,” Chief Executive Ed Thomas said.
The company reaffirmed its outlook for the three months through October.
It projects a same-store sales decline for the quarter of 6% to 9% on total sales of $138 million and $142 million, which would be down about 5% from a year earlier.
Wet Seal expects a profit of $1.9 million to $4.8 million.
“We are comfortable with inventory levels at both of our operating divisions and expect to be well-positioned as we enter the holiday season,” Thomas said.
One analyst is skeptical.
On Wednesday, Piper Jaffray & Co.’s Jeff Klinefelter cut his rating on Wet Seal’s stock to “neutral” from “overweight,” suggesting his clients no longer add Wet Seal shares.
After a survey of teen shoppers, “We are less confident in the company’s ability” to post gains from a year ago, Klinefelter said.
Wet Seal has seen “mindshare slippage” among shoppers, the analyst said.
The company runs 415 Wet Seal stores selling clothes for teen girls and 81 Arden B. clothing stores for young women.
