Wet Seal posts Q2 sales increases, misses estimates

FOOTHILL RANCH, Calif. — The Wet Seal Inc. reported net sales of $137.2 million during the second quarter of fiscal 2013. Despite seeing a 1.5% increase from the second quarter of the previous year, results fell a bit short of the $138.5 million analysts had estimated.

Same-store sales grew 3.7%, a substantial turnaround from an 11.1% same-store sales decline during the second quarter of fiscal 2012. E-commerce sales, which are not included in same-store sales totals, remained flat. The company expects earnings per share of about one cent, in line with previous guidance of EPS ranging from flat to two cents per share. Wet Seal will release full earnings for the quarter on Aug. 27.

“We’re pleased to see the business return to positive comp store sales, particularly against the backdrop of a challenging retail environment in June and July," said John D. Goodman, CEO of Wet Seal. "While sales trends softened during the latter months of the period, we generated positive comparable store sales each month of the quarter and achieved an improved blend of regular and promotional pricing. This enabled us to generate a substantial increase in merchandise margin versus a year ago and deliver on our previously announced expectations for earnings improvement. We also ended the quarter with inventories well-positioned entering the key back-to-school shopping period.”

Wet Seal has made notable progress toward restoring top line growth and improving margins by delivering great product and enhancing its brand positioning, according to the company. It is focusing on strengthening its marketing programs and customer engagement initiatives to secure customer loyalty. New leadership in its Arden B division has begun to influence the product assortment, the company stated, and is expected to have a more pronounced effect on both merchandise and brand positioning beginning in the third quarter.

As of August 3, the company operated a total of 525 stores in 47 states and Puerto Rico, including 464 Wet Seal stores and 61 Arden B stores.

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