The Wet Seal First Quarter Earnings Sneak Peek

The Wet Seal, Inc. (NASDAQ:WTSLA) will unveil its latest earnings on Tuesday, May 22, 2012. 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.

The Wet Seal, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 2 cents per share, a decline of 75% from the company’s actual earnings in the year-ago quarter. During the past three months, the average estimate has moved down from 7 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 3 cents during the last month. Analysts are projecting profit to rise by 15.8% versus last year to 16 cents.

Past Earnings Performance: Last quarter, the company saw profit of 3 cents per share versus a mean estimate of net income of 3 cents per share. This comes after two consecutive quarters of exceeding expectations.

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Wall St. Revenue Expectations: Analysts predict a decline of 4.1% in revenue from the year-earlier quarter to $149.6 million.

Analyst Ratings: Analysts seem relatively indifferent about Wet Seal with four of seven analysts surveyed maintaining a hold rating.

A Look Back: In the fourth quarter of the last fiscal year, profit fell 78.6% to $1.1 million (2 cents a share) from $5.3 million (5 cents a share) the year earlier, meeting analyst expectations. Revenue fell 1.4% to $163.2 million from $165.5 million.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 13.3% in the first quarter of the last fiscal year, 13.1% in the second quarter of the last fiscal year and 3.9%in the third quarter of the last fiscal year before dropping in the fourth quarter of the last fiscal year.

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose more than twofold in the first quarter of the last fiscal year, 36.1% in the second quarter of the last fiscal year and 46.3% in the third quarter of the last fiscal year before declining in the fourth quarter of the last fiscal year.

Stock Price Performance: Between March 20, 2012 and May 16, 2012, the stock price had fallen 45 cents (-12.8%), from $3.51 to $3.06. The stock price saw one of its best stretches over the last year between November 29, 2011 and December 6, 2011, when shares rose for six straight days, increasing 16.9% (+54 cents) over that span. It saw one of its worst periods between May 1, 2012 and May 8, 2012 when shares fell for six straight days, dropping 10.4% (-35 cents) over that span.

(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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