Wet Seal’s Losses Continue

Wet Seal Inc., which sells trendy clothes to girls and women, continued Thursday to pile up losses in the first quarter as comparable-store sales slumped almost 26% compared with the previous year.

But the company’s stock price jumped 15% as investors focused on the positive as some analysts said the retailer finally could be gaining traction as it tries to turn its business around. Shares closed at $10.05, up $1.32, on Nasdaq.

The Foothill Ranch-based company lost $8.5 million, or 29 cents a share, in the quarter ended May 3, compared with a profit of $8.7 million, or 28 cents, in the year-ago period. A consensus of analysts surveyed by Thomson First Call expected a loss of 30 cents a share.

Sales declined 21% to $123.6 million, compared with $156.6 million a year ago.

“Our first-quarter results were exceedingly disappointing,” said Susan O’Toole, head of the Wet Seal division, which has been working with focus groups to figure out what teen girls will buy.

In a conference call with analysts Thursday, Chief Financial Officer Walter Parks said the company has been working to remake the business and has improved merchandise offerings in its 620 Wet Seal, Arden B. and Zutopia stores. A test of how effective it has been will come in July when the retailer launches its important back-to-school selling season.

Wet Seal has been struggling since last year’s back-to-school season to get back in step with the girls and young women who shop at its stores. In February, the company dismissed its longtime chief executive, Kathy Bronstein.

Since then, new department heads have had more freedom to manage their divisions and control the merchandise in their stores, said Jeffrey Van Sinderen, an analyst with B. Riley & Co.

Although same-store sales were improving earlier in the quarter and the firm had a good Easter week, sales slowed in late April and early May, Chairman Irving Teitelbaum said in a statement. May same-store sales, he said, could be “somewhat weaker than seen in April,” when they were down 16.9%.

On a brighter note, the company said newer merchandise has been selling better than the older clothes.