Wet Seal Shares Gain 20% After Analyst Projects Rebound

Shares in Wet Seal Inc. climbed 20% Friday after an analyst projected a strong fiscal 1995 for the Irvine-based specialty retailer.

CNBC’s Dan Dorfman reported that money manager Chuck Royce expects the company to post earnings of as much as 30 cents a share for the coming year as clothing stores move away from the grunge look. Wet Seal specializes in young women’s apparel.

In Nasdaq trading Friday, the company’s shares climbed 75 cents to close at $4.50 a share.

Dorfman said Royce also expects Wet Seal’s earnings to climb to 60 cents a share in the year ending January, 1996. For its latest year, the company posted a loss of $2.3 million, or 19 cents a share, on sales of $140.1 million.

“Grunge is dead,” said Eric Appell, senior analyst at Torrey Pines Securities in San Diego. He projected earnings of 15 cents a share for Wet Seal in fiscal 1995.

Wet Seal could perform better than that if some of its lines catch on, such as clothes emphasizing the disco or schoolgirl looks, Appell said.

“We haven’t seen juniors go through a wholesale wardrobe replacement in a long time,” he said, since grunge became popular.

“Now you’ll start to see customers buying more than one item at a time,” he said.