FOOTHILL RANCH, Calif. (AP) -- Shares of Wet Seal Inc. tumbled 10 percent Wednesday, a day after the struggling teen retailer said it hired financial advisors and adopted a shareholder rights plan designed to protect itself from any takeover attempt.
The Foothill Ranch, Calif.-based company, which fired its CEO last month, also issued profit and sales guidance for the current quarter well below average Wall Street estimates, along with second-quarter results that were roughly in line.
Wet Seal's sales have tumbled in recent months, hurt by slower spending by teenage shoppers. The company's shares have dropped nearly 30 percent over the past 12 months.
Last month Wet Seal fired CEO Susan McGalla without naming a replacement, citing the company's financial performance. She had been Wet Seal's CEO since January 2011, and had signed an employment contract with the company through August 2014.
Late Tuesday the company said that its board appointed a strategic committee of three board members who will make recommendations on the company's spending and look for ways to boost shareholder value.
The board also hired the firms Guggenheim Securities LLC and Peter J. Solomon Co. to act as financial advisers on a variety of issues, including shareholder value.
At the same time the board adopted a shareholder rights plan that runs through June 30, 2013. Current shareholders will receive the right to buy preferred stock if someone acquires more than 10 percent of the company's common stock, or announces a tender offer for more than 10 percent of the company's common stock.
Wet Seal expects to post a third-quarter loss of 13 to 16 cents per share on sales of $128 million to $133 million. Analysts polled by FactSet expected a loss of 1 cent per share on $145.3 million in revenue.
In the second quarter Wet Seal had a loss of $12.4 million, or 14 cents per share, compared with a profit of $2.2 million, or 2 cents per share, in the same quarter last year. Excluding one-time charges, the company's loss was 7 cents per share for the recent quarter.
Sales fell 9.1 percent to $135.3 million.
Analysts expected a loss of 7 cents per share on $136.7 million in revenue.
Wet Seal shares fell 41 cents, or 13.4 percent, to $2.65 in morning trading. Over the past 52 weeks, the company's shares have traded between $2.42 and $5.23.