FINANCE

Wet Seal swings to profit in second quarter; to add in-store plus collection

BY Dan Berthiaume

Foothill Ranch, Calif. — The Wet Seal Inc. swung to a profit in the second quarter, reporting net income of $1 million, compared to a net loss of $12.4 million a year earlier. The retailer also announced it is introducing its Wet Seal Plus Collection, previously available only online, to 36 stores, on Aug. 30.

In addition, net sales totaled $137.2 million, up about 1% from $135.3 million in the second quarter of 2012. Same store sales grew 3.7%, while e-commerce sales remained flat. Overall results were in line with Zack’s consensus estimates.

“During the second quarter we achieved strong year-over-year improvement across all of our key financial metrics,” said John D. Goodman, CEO of Wet Seal. “We delivered comparable store sales growth of 3.7%, expanded our merchandise margin, reduced expenses and attained profitability. Our performance reflects the benefits of our fast fashion operating model, ongoing progress against our turnaround strategies and strong inventory management."

During the quarter, the company opened one and closed one Wet Seal store, resulting in a total count of 525 stores in 47 states and in Puerto Rico as of Aug 3.

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FINANCE

Zales returns to full-year profitability

BY Dan Berthiaume

Dallas — Zale Corp. narrowed its net loss in the fourth quarter to $8 million, from $19.7 million a year ago. Despite the loss, the retailer reported its first profitable fiscal year since the financial crisis in 2008.

“We are pleased to report another solid quarter with a 5.6 percent comp and significant improvement to margins,” said Zales CEO Theo Killion.” Importantly, for the year we achieved a significant milestone by delivering our highest net income in six years. “We intend to build on this momentum as we focus on driving profitable top-line growth and long-term shareholder value.”

Revenue for the quarter ended July 31, rose 2.5% to $417.1 million. Same-store sales increased 5.6%, including an 8.1% increase at its namesake division. Both the quarterly net loss and revenue gain beat Wall Street expectations

For the full year, revenues were $1.89 billion compared to $1.87 billion in fiscal year 2012. Same-store store sales increased 3.3%. Net earnings were $10 million, compared to a net loss of $27 million, in fiscal year 2012.

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Q2 Comp-store sales slip at Chico’s FAS

BY CSA STAFF

FORT MYERS, Fla. — Chico’s FAS’s financial results for the second quarter ended Aug. 3 were affected by a lower transaction count and average dollar sales, primarily because of lower traffic and the cycling of strong comparable sales last year.

The company reported net income of $43.6 million for the quarter — a decrease of 18.4% compared to $53.4 million in the year-ago quarter, and earnings per diluted share of $0.27, a decrease of 15.6% compared to $0.32 per diluted share in the year-ago quarter.

Net sales were $649.5 million for the quarter, up 1.2% from $641.7 million in the year-ago quarter, primarily reflecting 112 net new stores for a square footage increase of 8.8%.

Meanwhile, comparable sales for the quarter decreased 2.6% following a 5.6% increase in last year’s second quarter.

The Chico’s/Soma Intimates brands’ comparable sales decreased 3.1% following a 7.2% increase in last year’s second quarter for a two-year stack of up 4.1% and the White House | Black Market brand’s comparable sales decreased 1.5% following a 2.3% increase in last year’s second quarter for a two-year stack of up 0.8%.

The women’s omnichannel specialty retailer operates under the Chico’s, White House | Black Market, Soma Intimates and Boston Proper banners, and counts with 1,427 stores in the US as well as corresponding e-commerce sites.

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