Investors looked past a modest profit forecast for the current quarter by Foothill Ranch-based Wet Seal Inc. and drove up the company’s shares Wednesday after the retailer beat estimates for the recently ended quarter.
Wet Seal reported net income of $7.6 million for the quarter ended May 5, versus a loss of $14 million a year earlier. Analysts had expected $6.5 million in profits for the quarter.
The company said a better handling of inventory and expenses and sales of more profitable clothes drove the gain.
Shares of Wet Seal, which have a market value of about $570 million, rose about 6% on Wednesday.
Sales during the recently ended quarter rose 10% to $138 million. Sales at stores open for at least a year were up 2.7%.
For the current quarter, Wet Seal expects profits of up to $8.6 million, the lower end of what analysts were expecting.
Same-store sales for May and the current quarter could rise in “the low-single-digit range,” the company said.
Earlier this month, Wet Seal said Chief Executive Joel Waller, who’s led a turnaround of the retailer, plans to step down in February.
