The Wet Seal, Inc., a leading specialty retailer to young women, reported net sales of $127.7 million and a comparable store sales increase of 0.8% for the 13-week period ended November 2, 2013.
"We were able to deliver positive comp store sales and significantly improved merchandise margins versus a year ago despite the extremely tough retail environment," stated John D. Goodman, Chief Executive Officer.
"As we prepare for the upcoming holiday season, we are maintaining an appropriate mix of regular and promotional pricing and remaining sharply focused on inventory management. At quarter-end, inventory dollars per square foot were down approximately 3% versus the prior year at Wet Seal and approximately 20% versus the prior year at Arden B. We are also continuing to exercise strict control over costs, resulting in a decrease in SG&A expenses versus the prior year period.
"We believe the business is positioned to react quickly to potential improvement in mall traffic and overall macro trends. Additionally, we recently completed the re-platform of our Wet Seal and Arden B web sites, which we believe will substantially improve the customer shopping experience and help drive e-commerce growth."
E-commerce sales, which are not a component of comparable store sales, declined approximately 19% for the period compared to an increase of 8.7% in the third quarter of fiscal 2012. Through more disciplined management of promotional pricing, the Company generated an improved e-commerce merchandise margin rate versus the same quarter of last year. However, the focus on transitioning to a new Demandware e-commerce platform during the quarter impacted sales results. The re-platform was completed in late October and is now enabling customers to execute transactions more efficiently from their mobile devices.
Mr. Goodman further commented, "We are on track to complete the opening of 20 Wet Seal outlet center stores this year, having opened 8 locations during the third quarter, and with 12 additional locations opening in the next three weeks. The new stores will enable us to increase our penetration in outlet centers, which carry high productivity levels and generate strong returns."
Third Quarter Financial Guidance
The Company expects to report third quarter 2013 loss per diluted share of approximately $0.12 before non-cash asset impairments, which is in line with previously announced guidance for a loss per diluted share in the range of $0.10 to $0.12.
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 November 2, 2013, the Company operated a total of 530 stores in 47 states and Puerto Rico, including 471 Wet Seal stores and 59 Arden B stores.
