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Wet Seal sales down 5% in Q1 FY'13
29
May '13
The Wet Seal, Inc., a leading specialty retailer to young women, announced results for the first quarter of fiscal 2013 ended May 4, 2013.

First Quarter 2013

- Net sales for the quarter ended May 4, 2013, were $140.4 million compared to net sales of $147.9 million for the quarter ended April 28, 2012.

- Consolidated comparable store sales decreased 2.9%, including a decrease of 3.4% at Wet Seal and an increase of 0.9% at Arden B.

- Operating income was $3.2 million compared to operating loss of $0.4 million in the first quarter of fiscal 2012. The current year and prior year quarters include $1.6 million and $3.6 million, respectively, of non-cash asset impairment charges.

Operating income in the 2013 period also includes a $3.5 million benefit to adjust a loss contingency. Non-GAAP adjusted operating income, excluding the effect of the aforementioned charges and benefits, was $1.3 million in the first quarter of fiscal 2013 compared to $3.2 million in the prior year period.

- Operating income in the 2013 period also includes $1.7 million of incremental legal defense costs versus a year ago.

- Net income was $3.1 million, or $0.03 per diluted share, compared to net loss of $0.3 million, or $0.00 per diluted share, in the prior year quarter. Non-GAAP adjusted net income in the first quarter of fiscal 2013, excluding the after-tax effect of the asset impairment charges and benefit to adjust a loss contingency accrual, was $1.3 million, or $0.01 per diluted share. Non-GAAP adjusted net income in the first quarter of fiscal 2012, excluding the after-tax effect of the asset impairment charges, was $1.9 million, or $0.02 per diluted share.

- At quarter’s end, the Company’s inventory per square foot was down 7.7% versus a year ago, with Wet Seal down 7.6% and Arden B down 6.3%.

“We are pleased with the operating and financial momentum we’re beginning to experience,” said John D. Goodman, Chief Executive Officer. “We have made good progress in a short period of time throughout the organization.

Our teams have executed well and delivered improvement in virtually every aspect of the business, including product, inventory management, merchandising, marketing, in-store presentation and customer engagement. This allowed us to exceed our financial guidance in the first quarter and forecast a return to positive comp store sales earlier than planned in the second quarter of 2013.

“We have effectively stabilized the business,” continued Goodman. “We are seeing an increasingly strong response to our product offerings and customer engagement strategies, while at the same time, we have closely managed inventory and significantly improved our merchandise margin. We believe the Company has the people, processes and brand strength to enable us to begin driving consistent performance, and we are enthusiastic about the opportunity to better position both Wet Seal and Arden B for long-term growth.”

Wet Seal

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