FOOTHILL RANCH, Calif. (AP) — Wet Seal expects to report a bigger fourth-quarter loss than previously projected due to lower-than-expected sales and more promotional activity than it had anticipated.
The retailer also announced Thursday that fiscal fourth-quarter sales at stores open at least a year dropped 16.5 percent, hindered by weakness at its Arden B and namesake stores.
This figure is a key indicator of a retailer's health. It excludes results from stores recently opened or closed.
CEO John D. Goodman said in a statement that the fourth quarter was tough in part because of weak mall traffic, a highly promotional environment in the teen sector and certain products not received favorably by its customers.
Wet Seal Inc. said that it now foresees a fourth-quarter loss of about 24 cents per share, before non-cash asset impairments. Its prior guidance was for a loss of 14 cents to 17 cents per share.
Analysts polled by FactSet predict a loss of 17 cents per share.
Total revenue for the fourth quarter fell to $124.8 million. Wall Street is looking for $136.8 million.
For the fourth quarter, sales at Arden B stores open at least a year slid 25 percent. It declined 15.4 percent at Wet Seal locations.
There was one extra week in the prior-year period. Excluding that extra week, total revenue dropped 18 percent.
Online sales fell about 20 percent.
For the fiscal year, sales at stores open at least a year declined 4.1 percent. At Arden B the figure dropped 7.6 percent, while at Wet Seal locations it fell 3.6 percent.
Total revenue declined to $530.1 million. Removing the extra week, the figure slipped 7 percent.
Online sales dropped approximately 10 percent.
Wet Seal is based in Foothill Ranch, Calif. It had 532 stores in 47 states and Puerto Rico as of Feb. 1.
Its shares finished at $2.07 on Wednesday. They are down almost 28 percent since a year ago and 60 percent below their high of $5.20 last summer.