The Wet Seal, Inc., a leading specialty retailer to young women, announced results for its fiscal fourth quarter and full year ended February 2, 2013. The Company noted that fiscal 2012 had 53 weeks versus 52 weeks in fiscal 2011; results for the fourth quarter and fiscal year 2012 include the additional week.
Fourth Quarter 2012
Net sales for the 14-week fourth quarter were $161.7 million compared to net sales of $163.2 million for the 13-week fourth quarter in fiscal 2011.
Consolidated comparable store sales declined 8.3%, including a comparable store sales decline of 9.1% at Wet Seal and 3.1% at Arden B. Comparable store sales for the current year quarter are versus the comparable fourteen weeks from the prior year.
Operating loss was $25.5 million, or 15.8% of net sales, compared to operating income of $2.2 million, or 1.4% of net sales, in the prior year quarter.
In the fourth quarter of fiscal 2012, the Company recorded a non-cash provision for income taxes of $71.1 million to establish a valuation allowance against its net deferred income tax assets.
John D. Goodman, chief executive officer of The Wet Seal, Inc., stated, “Fiscal 2012 was a challenging year for the Company, marked by changes in leadership, strategic direction and brand positioning, which had a significant impact on our financial performance. During the past two months, our team has moved quickly to begin stabilizing the business, get back to Wet Seal’s fast fashion roots and prepare for growth. Additionally, we have taken meaningful action to reduce expenses, control inventories and leverage the core strengths of our team members.
“Our merchandising and field organizations are excited about our renewed focus on the core customer and we are effecting change in the assortments as quickly as possible. At the same time, we’re improving the visual presentation in the stores and developing marketing programs and partnerships designed to influence our Wet Seal customers.
“We have also implemented strategic merchandising changes at Arden B, which are enabling us to gain traction in key product categories and drive improvement in overall business trends.”
Fiscal Year 2012
Net sales for the 53-week period were $580.4 million compared to net sales of $620.1 million in the 52-week period of fiscal 2011.
Consolidated comparable store sales declined 10.1%, including a comparable store sales decline of 10.1% at Wet Seal and 9.9% at Arden B.
Fiscal 2012 includes the aforementioned non-cash provision for income taxes of $71.1 million to establish the valuation allowance against the Company’s net deferred income tax assets.
Net loss was $113.2 million, or $1.28 per diluted share, compared to net income of $15.1 million, or $0.16 per diluted share, in fiscal 2011. Non-GAAP adjusted net loss in fiscal 2012, excluding the after-tax effect of the asset impairment, loss contingency, proxy solicitation, severance and investment banker early termination charges, and the provision for income taxes to establish the deferred tax asset valuation allowance, was $19.0 million, or $0.22 per diluted share.
Non-GAAP adjusted net income in fiscal 2011, excluding the after-tax effect of non-cash asset impairment charges, was $17.8 million, or $0.19 per diluted share.