Wet Seal Shares Jump 14% on Strong Sales, Earnings

Wet Seal Inc. shares rose 14% Thursday after the specialty apparel retailer reported better-than-expected fiscal third-quarter earnings on strong sales at its stores.

The stock climbed $2.94 a share to $24.44 in trading of 392,900 shares, almost twice the three-month daily average.

The earnings of Foothill Ranch-based Wet Seal topped projections that the retailer of young women’s clothing gave analysts in September, when it said weak demand for back-to-school clothes would push earnings below estimates. Before the warning, Wet Seal was expected to earn 48 cents a share.

Net income fell slightly to $5.42 million, or 41 cents a share, from $5.48 million, or 39 cents on a larger number of shares outstanding, a year ago. That beat the average estimate of 38 cents by four analysts surveyed by First Call Corp. for the quarter ended Oct. 31.

The company’s stores added 48 cents a share to third-quarter earnings, which offset a loss of 7 cents in its catalog division, Wet Seal said.

Sales rose 16% to $121.6 million from $104.4 million a year ago.

Wet Seal operates 432 stores in 42 states and Puerto Rico: 422 Wet Seal and Contempo Casuals stores, seven Limbo Lounge stores and three Arden B. stores.