The Wet Seal, Inc., a leading specialty retailer to young women, announced financial results for the first quarter of fiscal 2014 ended May 3, 2014.
First Quarter 2014
Net sales for the quarter ended May 3, 2014, were $116.7 million compared to net sales of $140.4 million for the quarter ended May 4, 2013.
Consolidated comparable store sales declined 16.9%, including a decline of 16.5% at Wet Seal and 19.4% at Arden B. Comparable store sales results include e-commerce, which alone increased 1.9%, including an 8.4% increase at Wet Seal, offset by a 20.0% decrease at Arden B.
Gross profit was $23.1 million compared to $42.2 million, while gross margin was 19.8% versus 30.1%, in the first quarter of last year.
Operating loss was $21.7 million compared to operating income of $3.2 million in the first quarter of fiscal 2013. The current year and prior year quarters include $7.3 million and $1.6 million, respectively, of non-cash asset impairment charges. Operating loss in the 2014 period also includes a charge of $0.3 million related to Arden B exit costs and a $0.5 million benefit for miscellaneous non-recurring other income.
Operating income in the 2013 period also includes a $3.5 million benefit to adjust a loss contingency. Non-GAAP adjusted operating loss, excluding the effect of the aforementioned charges and benefits, was $14.6 million in the first quarter of fiscal 2014 compared to Non-GAAP adjusted operating income of $1.3 million in the prior year period.
Net loss was $21.8 million, or $0.26 per diluted share, compared to net income of $3.1 million, or $0.03 per diluted share, in the prior year quarter. Non-GAAP adjusted net loss in the first quarter of fiscal 2014, excluding the after-tax effect of the asset impairment charges, Arden B exit costs, benefit for miscellaneous income and benefit for the gain on warrants and embedded derivatives liabilities, was $15.1 million, or $0.18 per diluted share. 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.
John D. Goodman, Chief Executive Officer, stated, "Our first quarter results were in line with our expectations and primarily reflect the macro factors that pressured the retail sector over the past several months - soft mall traffic, elevated promotional activity and disruptive weather. Our performance trend improved during the last month of the quarter and was highlighted by a strong Easter week. Throughout the period we saw increasing strength in our Wet Seal e-commerce business, which posted a first quarter gain of more than 8% versus a 9% increase last year.