Wet Seal Swings to 4Q Profit

Foothill Ranch, Calif. Wet Seal Inc. said Thursday it swung to a fiscal fourth-quarter profit as the prior-year period was weighed down by a large interest expense.

The company reported earnings for the period ended Feb. 2 of $12.2 million compared with a loss of $5.7 million in the previous year.

Year-ago results, which included an extra week, were hurt by a $10.2 million interest expense.

Quarterly sales grew 8% to $179.6 million from $166.4 million to top Wall Street's estimate of $174.3 million. Meanwhile, consolidated same-store sales dipped 1.4%.

Wet Seal swung to an annual profit of $23.2 million from a loss of $12.8 million a year earlier. Full-year revenue climbed 8% to $611.2 million from $564.3 million.

For all of fiscal 2008, the company expects its store count to remain flat or grow nominally, with 20 to 25 planned openings at Wet Seal offset by a similar number of combined Wet Seal and Arden B closings as leases expire. It forecasts fiscal 2008 net-capital expenditures will be between $24 million and $25 million, of which between $18 million and $20 million will be for construction of new stores or remodeling of existing stores upon lease renewals and/or store relocations.