Foothill Ranch-based Wet Seal Inc. said Tuesday its sales for the quarter ended May 27 were $116.7 million, a 16.8% drop from the $140.4 million in the same period last year.
The teen and contemporary retailer reported a loss of $21.8 million for the quarter, exceeding the company’s earlier estimates—it said in March it anticipated a net loss for the quarter of between $13.57 million and $16.11 million. Analysts expected a $4.24 million loss. It posted income of $3.1 million a year earlier.
John Goodman, the company’s chief executive, said first-quarter results “primarily reflect the macro factors that pressured the retail sector over the past several months—soft mall traffic, elevated promotional activity and disruptive weather … Our performance trend improved during the last month of the quarter and was highlighted by a strong Easter week … While we are disappointed with our first quarter results, the initiatives under our new strategic plan are beginning to bear fruit and we anticipate they will enable us to generate sequential improvement in our comparable store sales trend and merchandise margin rate throughout fiscal 2014.”
Company officials also said they expect to complete the conversion of its 54 Arden B locations into Wet Seal and Wet Seal Plus by the end of the second quarter. The stores will remain open through the term of their leases, after which 17 locations are scheduled to close.
Wet Seal said it plans to open 10 Wet Seal stores this year, mostly outlet centers, while shuttering 23 stores as those leases expire—up from the 17 announced in March.
The company’s market value is about $85.5 million. It operates 475 Wet Seal stores, its largest retail division.
