Slight increase in expected gross margin at Wet Seal

08 Feb '08

3 min read

The Company is increasing its fiscal fourth quarter earnings guidance to net income of between $0.09 to $0.10 per diluted share as compared to a previous estimate of net income of between $0.06 to $0.08 per diluted share. The increased guidance is primarily a result of better than previously estimated operating expense savings and a slight increase in expected gross margin.

This estimate does not include any benefit from potential breakage revenue related to unredeemed gift cards or sales credits, nor does it include potential non-cash charges that may result from the Company's current review of certain assets for evidence of impairment.

Ed Thomas, chief executive officer of The Wet Seal Inc, commented: "Our January sales results were in line with our expectations and consistent with the trends we've seen in the macro environment for several months. We achieved relatively stronger performance in our Wet Seal stores and experienced continued weakness at Arden B.

With these expected results in mind, we managed inventories to be conservatively positioned entering the spring season. As a result, of this and our efforts to further improve inventory turnover, we estimate our month-end inventory per square foot decreased approximately 15% versus the prior year and we believe it is at an appropriate level as we enter fiscal 2008."

The Wet Seal Inc

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