Wet Seal Earnings: Reversing to a Loss Following Two Consecutive Quarters of Profit
The Wet Seal, Inc. (NASDAQ:WTSLA) swung to a loss in the first quarter, missing analysts’ forecast. 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 Earnings Cheat Sheet for the First Quarter
Results: Reported a loss of $273,000 (0 cents per diluted share) in the quarter. The Wet Seal, Inc. had a net income of $8 million or 8 cents per share in the year-earlier quarter.
Revenue: Fell 5.2% to $147.9 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: The Wet Seal, Inc. fell short of the mean analyst estimate of 2 cents per share. Analysts were expecting revenue of $149.6 million.
Quoting Management: Susan McGalla, the Company’s chief executive officer, commented, “We are disappointed with our first quarter results and recent sales trends at both Wet Seal and Arden B. We are taking immediate actions to rebalance the assortments towards stronger selling categories.
“At Wet Seal, challenges in our tops business overshadow important progress we have made in our turnaround. Our fashion trend and color execution is relevant and strong. We are seeing strength and consistency in several key trending categories, including woven tops, fashion denim, shorts, dresses, blazers, shoes and accessories, and we look to build upon their success through the second quarter and into the third quarter.”
WTSLA ended a three-quarter streak of profits when it reported a loss in the latest quarter. The company reported a profit of $1.1 million in the fourth quarter of the last fiscal year, a profit of $3.7 million in the third quarter of the last fiscal year and $2.2 million in the second of the last fiscal year.
The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 3 cents.
Revenue has dropped in the past two quarters. In the fourth quarter of the last fiscal year, revenue declined 1.4% to $163.2 million from the year-earlier quarter.
Looking Forward: Analysts have a positive outlook for the company’s performance next quarter. Over the past seven days, the average estimate for the second quarter has gone up to 2 cents a share from one cent. At 16 cents per share, the average estimate for the fiscal year has fallen from 23 cents ninety days ago.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
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