The Wet Seal Third Quarter Earnings Sneak Peek

The Wet Seal, Inc. (NASDAQ:WTSLA) will unveil its latest earnings on Thursday, November 15, 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 loss of 13 cents per share, a swing from net income of 5 cents in the year-earlier quarter. During the past three months, the average estimate has moved down from a loss of one cent. Between one and three months ago, the average estimate moved down. It has risen from a loss of 15 cents during the last month. Analysts are projecting a loss of 21 cents per share versus profit of 19 cents last year.

Past Earnings Performance: Last quarter, the company reported net loss of 7 cents per share, in line with the mean estimate. It was the third straight quarter of meeting expectations.

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A Look Back: In the second quarter, the company swung to a loss of $12.4 million (14 cents a share) from a profit of $2.2 million (2 cents) a year earlier, meeting analyst expectations. Revenue fell 9.1% to $135.3 million from $148.8 million.

Wall St. Revenue Expectations: Analysts are projecting a decline of 13.8% in revenue from the year-earlier quarter to $131.1 million.

Stock Price Performance: Between September 14, 2012 and November 9, 2012, the stock price had fallen 23 cents (-7.3%), from $3.13 to $2.90. The stock price saw one of its best stretches over the last year between August 31, 2012 and September 10, 2012, when shares rose for six straight days, increasing 13.4% (+39 cents) over that span. It saw one of its worst periods between October 17, 2012 and October 26, 2012 when shares fell for eight straight days, dropping 8.7% (-27 cents) over that span.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 1.4% in the fourth quarter of the last fiscal year and 5.2% in first quarter before falling again in the second quarter.

Analyst Ratings: There are mostly holds on the stock with three of five analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 3.3 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 3.65 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 6.7% to $65.7 million while assets decreased 3.4% to $216.8 million.

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

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