US: The Wet Seal swings to third-quarter loss
- Q3 loss of $14.8m from $3.7m profit last year
- Sales down 10.9% to $135.5m
- Company remains confident in its outlook
The Wet Seal has swung to a third-quarter loss after legal costs, impairment charges and falling sales hurt the teen apparel retailer.
The company, which operates 472 Wet Seal and 81 Arden B stores, posted a net loss of $14.8m, against a $3.7m profit last year.
During the quarter, Wet Seal settled a proxy battle with dissident shareholder Clinton Group with the resignation of its chairman and three directors. Excluding charges and costs, third-quarter net loss would have been $9.7m compared to a profit of $4.1m the year before.
Operating loss reached $24.8m, against a $6.1m profit during the same period last year.
Sales slipped 10.9% to $135.5m, while comparable sales at the Wet Seal and Arden B stores declined 13.5% and 13.8% respectively.
"While business in the third quarter remained challenging, we were encouraged by early signs of progress." the company said in a statement. "Adjustments made to our merchandise assortment contributed to improved sales trends as we moved through the quarter.
"We began to transition Wet Seal back to its roots of being a fast fashion retailer, offering a broad assortment of on-trend merchandise at value price points that align with the tastes of the young teens to early 20s target customer. We believe we are now on a path that will lead to improved financial performance."
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