For its fiscal third quarter ended November 1, 2014, net loss at The Wet Seal, a leading specialty retailer to young women nearly tripled from the year ago quarter.
In the third quarter of 2014 net loss nearly tripled to $36.0 million or $0.43 per diluted share as against net loss of $12.5 million or $0.15 per diluted share, in the prior year quarter.
Net sales slipped to $104.3 million in the reporting quarter versus net sales of $114.9 million in the third quarter of 2013, while consolidated comparable store sales declined 14.5 per cent.
Gross profit too tumbled to $14.3 million in the reporting quarter from $27.4 million in the year ago third quarter, while gross margin fell to 13.7 per cent vis-a-vis 23.8 per cent in the third quarter of 2013.
“The year-over-year fall in gross margin was due to lower merchandise margins as well as higher occupancy costs as a percentage of sales driven by sales de-leverage from lower average store sales,” Wet Seal said.
Operating loss too was higher at $36.3 million as against operating loss of $12.4 million in the third quarter of fiscal 2013.
Wet Seal said the current year and prior year quarters include $12.6 million and $4.8 million, respectively, of non-cash asset impairment charges.
As of November 1, 2014, Wet Seal had cash and cash equivalents of $19.1 million and $21.3 million in convertible debt, net of discount.
Third quarter of 2014 inventory declined 26 per cent to $31.6 million from $42.6 million a year ago. Inventory per square foot too slipped 26 per cent compared with the same quarter last year.
CEO Ed Thomas said, “A key priority is to address our immediate liquidity needs in the very near term in order for us to have the time and resources to be able to implement our operating strategies.”
“As we work to implement these strategies, we intend to prudently manage cash, take a disciplined approach to inventory management and continue to look for opportunities to reduce costs," he added. (AR)
