The Wet Seal, Inc. Announces July Comparable Store Sales Declined 15.6%
Comments on Near-Term Merchandising Actions;
Updates Second Quarter EPS Guidance
FOOTHILL RANCH, Calif.--(BUSINESS WIRE)--
The Wet Seal, Inc. (Nasdaq: WTSLA), a leading specialty retailer to
young women, reported net sales and comparable store sales for the
four-week period ended July 28, 2012, or fiscal July, and the fiscal
second quarter ended July 28, 2012, as follows:
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Fiscal July
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Comparable Store Sales
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Net Sales
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% Change
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% Change From
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$ in Millions
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Last Year
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This Year
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Last Year
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Wet Seal
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$
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34.3
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-13.3
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%
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-15.9
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%
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7.8
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%
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Arden B
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6.1
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-10.8
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%
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-14.1
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%
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5.0
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%
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Total
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$
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40.4
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-12.9
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%
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-15.6
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%
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7.4
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%
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Fiscal Second Quarter
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Comparable Store Sales
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Net Sales
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% Change
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% Change From
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$ in Millions
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Last Year
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This Year
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Last Year
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Wet Seal
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$
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113.7
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-9.0
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%
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-11.0
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%
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6.2
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%
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Arden B
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21.6
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-9.1
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%
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-11.6
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%
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5.0
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%
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Total
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$
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135.3
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-9.1
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%
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-11.1
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%
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6.0
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%
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E-commerce sales declined 6% and 5% in fiscal July and the fiscal second
quarter, respectively, as compared to declines of 17% and 13% in the
prior year fiscal month and quarter, respectively.
Hal Kahn, Chairman of the Board of The Wet Seal, Inc., said: "The second
quarter ended with weak July sales results. We believe the Company's
performance in recent quarters is due in part to a move away from some
of our fast fashion merchandising practices at Wet Seal that had been
successful in the past. Price points were elevated in many product
categories, and we believe the Company ceded a key part of its customer
base.
"Starting last week, I began to set merchandising direction for the
Company. I am leading the Office of the Chairman, which also includes
President and Chief Operating Officer Ken Seipel and Chief Financial
Officer Steve Benrubi. We are taking immediate steps to return key
elements of our prior core strategy, which include improving the speed
and agility of our buying practices, expanding assortment breadth and
adjusting prices to ensure we offer fast fashion at a value. We believe
these initiatives will result in improved sales performance and enable
us to, again, attract a broader customer demographic to Wet Seal,
including the younger teen, which we may have lost during the past year.
"As of quarter-end, we estimate total inventory dollars per square foot
decreased 4% versus the prior year, with Wet Seal down 2% and Arden B
down 21%. Entering the third quarter, we have positioned inventories in
both divisions to enable us to replenish and offer more relevant fashion
for our customers," said Mr. Kahn.
Mr. Kahn added, "Separately, our Board of Directors is conducting a
thorough capital planning review and developing a strategic plan to
enhance shareholder value. As previously disclosed, we intend to
communicate the details of these efforts and progress with our operating
initiatives to our shareholders during our quarterly earnings call on
August 21st."
The Company currently estimates a second quarter loss per diluted share
of between $0.09 and $0.10. This includes the after-tax effect of
estimated severance costs for the Company's former CEO of $0.02 per
diluted share and estimated non-cash asset impairment charges of $0.01
per diluted share. Before the impact of the CEO severance and asset
impairment charges, the Company expects a second quarter loss per
diluted share of between $0.06 and $0.07, which is unchanged from the
Company's recently updated guidance range.
About The Wet Seal, Inc.
Headquartered in Foothill Ranch, California, The Wet Seal, Inc. is a
leading specialty retailer of fashionable and contemporary apparel and
accessory items. As of July 28, 2012, the Company operated a total of
550 stores in 47 states and Puerto Rico, including 468 Wet Seal stores
and 82 Arden B stores. The Company's products can also be purchased
online at www.wetseal.com
or www.ardenb.com.
For more Company information, visit www.wetsealinc.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995: This news release contains forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, but are not limited to,
statements that relate to the Company's estimated second quarter
earnings per share and inventory levels, near-term merchandising actions
and planned future communications, as well as the intent, belief, plans
or expectations of the Company or its management. All forward-looking
statements made by the Company involve material risks and uncertainties
and are subject to change based on factors beyond the Company's control.
Accordingly, the Company's future performance and financial results may
differ materially from those expressed or implied in any such
forward-looking statements. Such factors include, but are not limited
to, those described in the Company's filings with the Securities and
Exchange Commission. This news release contains results reflecting
partial year data and non-fiscal data that may not be indicative of
results for similar future periods or for the full year. The Company
will not undertake to publicly update or revise its forward-looking
statements even if experience or future changes make it clear that any
projected results expressed or implied therein will not be realized.
The Wet Seal, Inc.
Steven H. Benrubi, 949-699-3947
Source: The Wet Seal, Inc.
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