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Wednesday, Mar 29, 2023

Wet Seal Sales Better Than Expected, Sees Profit at High End of Guidance

Foothill Ranch-based mall retailer Wet Seal Inc. reported a better than expected decline in December sales and said it sees profits for the current quarter coming in at the high end of its prior guidance.

Wet Seal, which runs clothing stores for teen girls and young women, said sales at stores open at least a year fell 4.6% for the five weeks through last Saturday.

Analysts surveyed by Thomson Reuters on average expected a 5.6% decline in same-store sales.

The company runs 504 stores made up of 424 Wet Seal stores for teen girls and 80 Arden B. stores for young women.

December sales at Wet Seal stores were down 7.3%. Arden B. saw a 14.1% rise.

Total monthly sales fell 1.8% to $75.8 million.

Shares of Wet Seal closed up about 7% Thursday on a market value of $325 million.

The company also said it sees its profit for the three months through January coming in at $5.7 million to $6.7 million, versus a prior range of $2.9 million to $6.7 million.

Chief Executive Ed Thomas cited “cost management discipline” for the new profit forecast.

Wet Seal is “pleased” with the low amount of clothes it has on hand plans to stock up this month, Thomas said.

“That should position us for comparable store sales growth opportunity,” he said.

Like other retailers, Wet Seal went light on merchandise over the holidays to avoid having to blowout unsold clothes at a loss.

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