Slow Season Will Lower Wet Seal’s Third Quarter
Wet Seal Inc. said third-quarter earnings will be below expectations as same-store and catalog sales were lower due to a weaker-than-expected back-to-school season.
The Foothill Ranch-based retailer of young women’s casual clothes said it will earn 35 cents to 40 cents a share in the quarter ending in October, less than the 48-cent average estimate of four analysts surveyed by First Call Corp. The company earned 39 cents a share a year ago.
Wet Seal’s sales at stores open at least a year fell about 2.5% as back-to-school sales were lower over the last 2 1/2 weeks, especially in the U.S. Northeast and mid-Atlantic regions, where Wet Seal has 20% of its locations. Wet Seal said it had lower sweater and accessories sales.
“We do not believe there are any fundamental issues with our business and we remain dedicated to the growth plans we previously outlined,” said chief executive Kathy Bronstein.
Bronstein said Wet Seal’s margins and inventory levels are strong and the company plans to open about 40 stores before Christmas. It currently has 35 stores.
Also, Wet Seal’s board approved the repurchase of 10% of the company’s shares from time to time at the discretion of management.
The retailer disclosed the projections after the market closed. Wet Seal’s shares rose 56 cents to $19.75.
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