USA: Wet Seal Posts Q4 Loss, Sees More Woe
Specialty fashion retailer The Wet Seal Inc on Thursday announced it swung to a fourth quarter loss on the back of weak holiday sales and a steep plunge in same-store sales.
The California-based retailer of 610 stores under banners such as Arden B and Zutopia reported a net loss of 19 cents a share for the quarter ended February 1 compared to net earnings of 49 cents a share in the year-ago period.
The company said net sales fell to $161.2m from $181.5m with same-store sales down 18 per cent. Full year sales rose to $608.5m from $601.9m while annual same-store sales fell 5.6 per cent. It added earnings for the full year fell to 14 cents a share from $1.02 a share.
Wet Seal said based on current trends, same-store sales are expected to decline 23 to 28 per cent in March and eight to 14 per cent in April. As a result, the company could have a net loss for the quarter of 21 to 27 cents per share.
It also plans to scale back its capital expenditure but will press ahead with plans to open 35 new stores in the current fiscal year.
"This has been an extremely challenging year for us," said Irving Teitelbaum, chairman and interim CEO. "Following a very successful Spring season, we experienced disappointing results in both the back-to-school and holiday selling periods.
"However, we have responded aggressively and appropriately, particularly in our efforts to clear inventory and enable the flow of fresh and exciting new merchandise to our stores.
"With this year's Spring season now underway, we have new product arriving in our stores every week, and look forward to returning to more acceptable levels of sales and profitability as the year unfolds."
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