Wet Seal Q1 profits, sales drop

Foothill Ranch, Calif. The Wet Seal said late Thursday that the sluggish economy and poor inventory choices were to blame for a decline in its first quarter profit, revenue and same-store sales.

For the quarter ended May 2, the women’s specialty retailer earned $5.0 million, compared to $8.9 million for the same period a year ago. Sales dipped to $132.0 million, vs. $142.4 million for the same quarter last year. Same-store sales dropped 7.3%.

The chain blames the declines on the recession and “inventory-mix issues” that were identified early in the quarter, but it was able to hold its own with the help of strong sales at its Arden B banner, according to Wet Seal CEO Ed Thomas.

During the quarter, the chain opened one Wet Seal store and closed four Arden B locations, giving the chain 410 Wet Seal stores and 83 Arden B stores at the end of the period.

As the company settles into the second quarter, Wet Seal expects sales to reach between $135 million and $140 million, and same-store sales could decline between 7% and 10%.