Foothill Ranch-based mall retailer Wet Seal Inc. reported higher sales for the recently ended quarter and forecast another gain for the current quarter.
The company’s shares rose 6% in afterhours trading as Wall Street seized upon the sales outlook and looked past a tepid profit outlook for the current quarter.
Wet Seal has a market value of $335 million.
For the three months through October, Wet Seal reported revenue of $146.4 million, up 3% from a year earlier and topping the $144 million expected on average by analysts.
The company, which runs clothing stores for teen girls and young women, reported a profit of $2.6 million, down 42% from a year earlier and matching what Wall Street expected.
For the current quarter, Wet Seal projected a profit below what analyst had been expecting but said it sees sales coming in higher than what Wall Street had been counting on.
For the three months through January, Wet Seal forecast a profit of $2.6 million to $4.3 million, which would be down by about half or more from a year earlier.
Analysts had been forecasting a profit of $5.2 million.
Investors seemed to focus instead on Wet Seal’s improving sales forecast.
The company said it expects sales of $158 million to $163 million, which would be up as much as 8% from a year earlier.
Analysts had been forecasting sales of $156.2 million.
Wet Seal runs 522 stores across the country. The bulk, 444, are Wet Seal stores selling clothes for teen girls. The company also runs 78 Arden B. stores for young women.
For the 12 months through January, Wet Seal said it expects to have added 27 Wet Seal stores and four Arden B. stores, after accounting for closures of some stores.
