The Wet Seal cuts outlook on weak mall traffic

The Wet Seal lowers third-quarter outlook due to soft sales, weak mall traffic

Associated Press

FOOTHILL RANCH, Calif. (AP) -- Teen clothing retailer The Wet Seal Inc. said Tuesday it expects a wider third-quarter loss than previously forecast, due to weak mall traffic in the fall.

The Foothills Ranch, Calif.-based retailer, which runs the Wet Seal and Arden B chains, has been trying to turn around its business after an extended period of weak sales. It brought in a new CEO, cut jobs and has closed weaker performing stores.

But the company said weak mall traffic in September and October led to heavier-than-expected markdowns. The company now expects net loss per share of 10 cents to 12 cents per share, excluding asset impairments. That compares to prior guidance of a loss of 2 cents to 3 cents per share.

Analysts, on average, expect a loss of 2 cents per share, according to FactSet.

Also in the third quarter, Wet Seal expects sales in stores open at least one year, a key measure of a retailer's health, to rise in the low-single digit range, from prior guidance of mid-single digits.

"As we continue to navigate through this difficult period, we are carefully controlling expenses and are focused on closely managing inventories in both divisions to end the third quarter well-positioned ahead of the critical holiday selling season," CEO John D. Goodman said in a statement.

The company will report sales results on Nov. 7 and full results on Nov. 23.

Wet Seal shares closed Tuesday trading down 5 cents at $3.84 and was not trading afterhours. The stock remains up 39 percent since the start of the year.

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