Post-Earnings Review - Wet Seal

LONDON, January 7, 2015 /PRNewswire/ --

Investor-Edge.com has issued free post-earnings review on The Wet Seal Inc. (NASDAQ: WTSL). On December 10, 2014, the company reported its financial results for Q3 FY14 (period ended November 01, 2014). Click on www.investor-edge.com/FreeReports to read our free earnings review on The Wet Seal Inc. (Wet Seal). During Q3 FY14, the company's total net sales decreased 9.2% Y-o-Y and gross profit was $14.32 million. The CEO of Wet Seal, Ed Thomas stated that while the company's results came in at the low end of its expectations during Q3 FY14, Wet Seal continues to take important steps in its efforts to address its financial position and ongoing challenges. Our free coverage report can be accessed at:

www.investor-edge.com/register

Earnings Overview  

During Q3 FY14, Wet Seal's net sales decreased to $104.30 million from $114.88 million in Q3 FY13. Analysts at Bloomberg anticipated net sales of $93.02 million for the reported quarter. The company's consolidated comparable store sales for Q3 FY14 declined 14.5% Y-o-Y. In Q3 FY14, Wet Seal's gross margin declined to 13.7% from 23.8% in Q3 FY13, due to lower merchandise margins and higher occupancy costs as a percentage of sales driven by sales de-leverage from lower average store sales. The free research on WTSL can be downloaded as in PDF format at:

http://get.Investor-Edge.com/pdf/?c=Wet%20Seal&d=07-Jan-2015&s=WTSL

For Q3 FY14, the company's operating loss was $36.31 million, compared to operating loss of $12.43 million in Q3 FY13. The company's operating loss for Q3 FY14 and Q3 FY13 included non-cash asset impairment charges of $12.59 million and $4.76 million, respectively. The operating loss for the reported quarter also included $1.5 million in severance costs. Wet Seal's non-GAAP adjusted operating loss, excluding the effect of the above charges, stood at $22.2 million in Q3 FY14, compared to non-GAAP adjusted operating loss of $7.6 million in Q3 FY13.

For the reported quarter, Wet Seal recorded GAAP net loss from continuing operations of $36.03 million, or $0.43 loss per diluted share, compared to GAAP net loss of $12.48 million, or $0.15 loss per diluted share, in Q3 FY13. Bloomberg analysts expected the company to report GAAP net loss from continuing operations of $23.8 million, or $0.28 loss per diluted share, in Q3 FY14. During Q3 FY14, the company's non-GAAP adjusted net loss was $23.6 million, or $0.28 loss per diluted share, compared to non-GAAP adjusted net loss of $7.7 million, or $0.09 loss per diluted share, in Q3 FY13. Sign up and read the free analyst's notes on WTSL at:

http://get.Investor-Edge.com/pdf/?c=Wet%20Seal&d=07-Jan-2015&s=WTSL

As of November 1, 2014, Wet Seal reported cash and cash equivalents of $19.06 million and $21.3 million in convertible debt, net of discount. During the reported quarter, inventory decreased by 26% Y-o-Y to $31.59 million, while inventory per square foot declined 26% Y-o-Y. In Q3 FY14, Wet Seal opened one store and closed two. At the end of the quarter, Wet Seal operated 528 stores in 47 US states and Puerto Rico and it expects to shut down approximately 60 of those stores by the end of the Q4 FY14, due to lease term expiry.

Mr. Thomas asserted that a key priority for Wet Seal is to address its immediate liquidity needs in the very near term in order to have the time and resources to be able to implement its operating strategies. As described in the company's Quarterly Report on Form 10-Q filed by Wet Seal on the December 10, 2014, with the US Securities and Exchange Commission (SEC), in an effort to address its immediate liquidity needs, the company is, with the assistance of its strategic advisors, engaged in discussions with third parties, as well as key financial stakeholders. However, if the company is unsuccessful in the very near term in its efforts to address its immediate liquidity needs or otherwise experiences delays and difficulties in such efforts, it would seek a restructuring or other relief under the provisions of the U.S. Bankruptcy Code. Visit Investor-Edge and access the latest research on WTSL at:

http://get.Investor-Edge.com/pdf/?c=Wet%20Seal&d=07-Jan-2015&s=WTSL

Stock Performance   

On the day following the earnings release, December 11, 2014, Wet Seal's stock plummeted 70.13% to close the session at $0.08. Since then, shares of the company have witnessed a mixed momentum, with losses outperforming the gains. On the last close, Tuesday, January 06, 2015, Wet Seal's shares finished 7.72% lower at $0.06. The company's shares vacillated between $0.05 and $0.06 during the session. A total of 2.92 million shares were traded, which was above its three months average volume of 2.28 million shares. Over the previous three trading sessions and over the last one month, the company's shares have declined 15.25% and 80.70%, respectively. Further, the stock has plummeted 98.01% in past one year. Shares in Wet Seal closed below their 50-day and 200-day moving averages of $0.24 and $0.73, respectively. Furthermore, the stock has a Relative Strength Index (RSI) of 28.38.

Sneak Peek to Corporate Insider Trading   

In the last one month, Wet Seal has not reported any share transactions by insiders to the SEC. Complimentary in-depth research on WTSL is available at:

http://get.Investor-Edge.com/pdf/?c=Wet%20Seal&d=07-Jan-2015&s=WTSL

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