Wet Seal Posts Sharp 3rd-Quarter Loss
Clothing retailer Wet Seal Inc., reeling from disappointing sales during the back-to-school shopping season, posted sharply lower earnings for the third quarter and warned Thursday that fourth-quarter results probably will fall below analysts’ expectations.
The Foothill Ranch company, which misjudged the back-to-school fashions favored by young women, said net income fell 50% to $2.7 million, or 22 cents a share, in the three months ended Oct. 30, from $5.4 million, or 41 cents a share, a year ago. Sales increased 8% to $131.5 million, but sales dropped 12% at stores open at least a year--a key measure of industry performance.
For the record:
12:00 a.m. Nov. 20, 1999 For the Record
Los Angeles Times Saturday November 20, 1999 Orange County Edition Business Part C Page 2 Financial Desk 1 inches; 21 words Type of Material: Correction
Earnings report--Wet Seal Inc. posted lower earnings for the third quarter. A headline on a story Friday incorrectly described the decline as a loss.
The clothing retailer said same-store sales in its core Wet Seal and Contempo Casuals divisions are down through the third week of the fourth quarter, which means fourth-quarter results probably will fall below analysts’ expectations.
Analysts had predicted the company would earn 93 cents a share for the fourth quarter, according to a survey by First Call/Thomson. In the fourth quarter a year ago, Wet Seal earned 95 cents a share on revenue of $146 million.
Wet Seal had warned last month that third-quarter earnings would slump. It issued similar warnings twice in the second quarter.
The results were announced after U.S. stock markets closed. Wet Seal shares, which traded as high as $47 in May, closed Thursday at $13.50, up 56 cents, in Nasdaq trading.
