The Wet Seal, Inc., a leading specialty retailer to young women, reported net sales of $137.2 million and a comparable store sales increase of 3.7% for the 13-week period ended August 3, 2013.
Fiscal Second Quarter 2013
E-commerce sales, which are not a component of comparable store sales, were approximately flat for the period.
"We're pleased to see the business return to positive comp store sales, particularly against the backdrop of a challenging retail environment in June and July," said John D. Goodman, Chief Executive Officer. "While sales trends softened during the latter months of the period, we generated positive comparable store sales each month of the quarter and achieved an improved blend of regular and promotional pricing.
"This enabled us to generate a substantial increase in merchandise margin versus a year ago and deliver on our previously announced expectations for earnings improvement. We also ended the quarter with inventories well-positioned entering the key back-to-school shopping period.
"Since the beginning of the year, we have made notable progress toward restoring top line growth and improving margins by delivering great product and enhancing our brand positioning. We are continuing to execute against our core fast fashion strategy, while strengthening our marketing programs and customer engagement initiatives, which are enabling us to win back the Wet Seal customer. New leadership in our Arden B division has begun to influence the product assortment, and will have a more pronounced impact on both merchandise and brand positioning beginning in the third quarter."
The Company estimates that quarter-end inventory dollars per square foot increased approximately 3% versus the prior year at Wet Seal and decreased approximately 15% versus the prior year at Arden B.
Second Quarter Financial Guidance and Share Repurchase Program
The Company expects to report second quarter 2013 earnings per diluted share of $0.01 before non-cash asset impairments, which reflects strong merchandise margin improvement and is in line with previously announced guidance of earnings per diluted share of $0.00 to $0.02.
Wet Seal also announced that it has completed its $25 million share repurchase program. Under the program, the Company repurchased a total of 5,565,873 shares of its common stock at a weighted average cost of $4.48 per share, for a total cost, including commissions, of $25.0 million. During the second quarter ended August 3, 2013, the Company repurchased 4,359,224 shares of its common stock at a weighted average cost of $4.89 per share, for a total cost, including commissions, of $21.4 million.
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 August 3, 2013, the Company operated a total of 525 stores in 47 states and Puerto Rico, including 464 Wet Seal stores and 61 Arden B stores.
