Wet Seal Earnings: Swings Down to a Loss but Still Beats Estimates
The Wet Seal, Inc. (NASDAQ:WTSLA) reported its results for the third quarter. Wet Seal is a national retailer operating stores selling fashionable and contemporary apparel and accessory items designed for female customers aged 13 to 35 years old.
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The Wet Seal, Inc. Earnings Cheat Sheet
Results: Reported a loss of $14.8 million (17 cents per diluted share) in the quarter. The Wet Seal, Inc. had a net income of $3.7 million or 4 cents per share in the year-earlier quarter.
Revenue: Fell 10.9% to $135.5 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: The Wet Seal, Inc. reported an adjusted net loss of 11 cents per share. By that measure, the company beat the mean analyst estimate of a loss of 13 cents per share. It fell short of the average revenue estimate of $149.6 million.
Quoting Management: “While business in the third quarter remained challenging, we were encouraged by early signs of progress. Adjustments made to our merchandise assortment contributed to improved sales trends as we moved through the quarter. We began to transition Wet Seal back to its roots of being a fast fashion retailer, offering a broad assortment of on-trend merchandise at value price points that align with the tastes of the young teens to early 20′s target customer. We believe we are now on a path that will lead to improved financial performance. We also have a new board in place that brings a fresh perspective as well as in-depth merchandise expertise to our organization. They quickly became engaged during October and will be monitoring our progress during the fourth quarter as well as helping us refine the go-forward strategies we have in place.”
For four consecutive quarters, revenue has fallen. Revenue declined 9.1% to $135.3 million in the second quarter. The figure fell 5.2% in the first quarter from the year earlier and dropped 1.4% in the fourth quarter of the last fiscal year from the year-ago quarter.
The company beat estimates last quarter after meeting expectations in the second quarter with a loss of 7 cents per share.
Looking Forward: For the next quarter, analysts are growing pessimistic about the company’s expected results. The average estimate for the fourth quarter is now a loss of 3 cents per share, down from a profit of 3 cents ninety days ago. For the fiscal year, the average estimate has moved from a loss of 2 cents a share to a loss of 21 cents over the last ninety days.
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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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