Wet Seal had a good week on Wall Street, until Friday.
Shares of the Foothill Ranch-based retailer dipped 4.6% to $6 in late trading Friday after B. Riley & Co. downgraded the company to “sell.” As of Thursday, Wet Seal’s shares were up more than 14% for the week.
The Los Angeles investment bank cited valuation concerns after the company’s shares doubled in the past month.
It also said it thinks current levels reflect “a great deal of optimism about the company’s future profitability” and that “superb execution going forward is now priced in.”
Wet Seal’s plans to make a big stock award to consultant Michael Gold also is a concern, according to B. Riley. Gold is serving as a consultant to Wet Seal in its turnaround effort.
The women’s clothing retailer has been struggling for the past two years after some fashion missteps. It’s showing signs of progress of late.
Wet Seal closed 105 unprofitable stores in the first quarter. It reported a 57% jump in same-store sales for the month of May. Total sales in May rose 21% to $40 million.
