Nov 20, 2009
Wet Seal third quarter profit in line, sees weak fourth quarter
Nov 20, 2009
By Renju Jose
BANGALORE, Nov 19 (Reuters) - Wet Seal Inc (WTSLA.O) posted a quarterly profit in line with Wall Street estimates, but guided fourth quarter below market expectations, citing weak same-store sales trends in the first half of November.
Wet Seal swimwear Spring-Summer 2009
Shares of the specialty retailer, which runs the Arden B chain in addition to its namesake stores, slid 9 percent in after-hours trade.
For the fourth quarter, the company expects earnings of 3 cents to 7 cents a share. Analysts on average were expecting earnings of 8 cents a share, before items, according to Thomson Reuters I/B/E/S.
Wet Seal sees revenue of $149 million to $155 million in the quarter, below analysts' expectations of $156 million.
"Management historically gives a conservative outlook and given the lack of visibility in the first two weeks, it is a pretty realistic game plan and I do think there is an upside to numbers," Brean Murray, Carret & Co analyst Eric Beder told Reuters.
The consumer is taking a pause after Halloween and before the start of the holiday shopping season, Chief Executive Ed Thomas said in a statement. "We will continue to manage our business very conservatively."
However, Thomas said on a conference call that he expects to see an increase in traffic during the promotional 'Black Friday' selling period, above what was seen in the first two weeks of November. The holiday shopping season kicks off on Black Friday, the day after U.S. Thanksgiving, which falls on Nov. 27 this year.
The company said the chief merchandise officer at its Wet Seal division, Maria Comfort, resigned to pursue other interests.
It also named Sharon Hughes as the new chief merchandise officer at its Arden B chain.
For the third quarter ended Oct. 31, Wet Seal, which sells apparel and accessory items primarily for female customers aged 13 to 35 years, earned $4.5 million, or 4 cents a share, compared with $6.8 million, or 7 cents a share, a year earlier.
Revenue fell 3 percent to $141.5 million in the quarter.
Analysts expected earnings of 4 cents a share on revenue of $140.6 million.
Shares of Foothill Ranch, California-based Wet Seal fell 28 cents to $3.02 in after-hours trade. They closed at $3.30 Thursday 19 November on Nasdaq. (Reporting by Renju Jose in Bangalore; Editing by Unnikrishnan Nair)
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