The Wet Seal, Inc., a leading specialty retailer to young women, announced results for its fiscal fourth quarter and full year ended February 1, 2014. The Company noted that fiscal 2013 had 52 weeks versus 53 weeks in fiscal 2012; results for the fourth quarter and fiscal year 2012 include the additional week.
Fourth Quarter 2013
-Net sales for the 13-week fourth quarter were $124.8 million compared to net sales of $161.7 million for the 14-week fourth quarter in fiscal 2012.
-Consolidated comparable store sales declined 16.5%, including a comparable store sales decline of 15.4% at Wet Seal and 25.0% at Arden B. Comparable store sales for the current year quarter are versus the comparable thirteen weeks from the prior year.
-Versus the comparable thirteen week period from prior year, net sales for the fourth quarter of fiscal 2013 declined approximately 14% at Wet Seal, 43% at Arden B and 18% on a consolidated basis.
-Gross profit was $23.4 million, or 18.8% of sales, compared to $40.1 million, or 24.8% of sales, in the fourth quarter of fiscal 2012.
-Operating loss was $27.3 million compared to operating loss of $25.5 million in the prior year quarter.
The current year and prior year quarters included $8.0 million and $8.0 million, respectively, of non-cash asset impairment charges.
The prior year quarter also included a $6.6 million charge to accrue loss contingencies for several litigation matters, a $0.2 million benefit to adjust the amount of professional fees incurred to defend against a shareholder proxy solicitation to replace certain of the Company’s board members, which ultimately led to an agreement to replace four of the Company’s seven board members, $1.3 million in severance charges for a workforce reduction, and a $0.5 million charge for the early termination of two investment banker retention agreements.
Non-GAAP adjusted operating loss, excluding non-cash asset impairment charges, was $19.3 million in the 2013 fourth quarter.
Non-GAAP adjusted operating loss, excluding the impact of the aforementioned adjustment and charges, was $9.3 million in the 2012 fourth quarter (see reconciliation below of GAAP to non-GAAP financial measures).
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.