The Wet Seal, Inc. (WTSLA) is a specialty retailer of fashionable and contemporary apparel and accessory items designed for female consumers in the United States. The company operates two mall-based chains of retail stores under the names Wet Seal and Arden B. Wet Seal targets the fashion-conscious junior customer by providing brand name and company-developed apparel and accessories.
Wet Seal reported solid results for the 3rd quarter with EPS coming in at the high end of management's guidance. However, the company issued fourth quarter guidance of $0.06-$0.10, which was below the consensus of $0.12 and our estimate of $0.11. The company also expects fourth quarter sales of $155 million to $161 million, compared to our previous estimate of $171 million.
We are lowering our estimates to reflect its sales growth trending lower for the next few quarters. That said, we expect the company to continue to benefit from cost controls, inventory management, and fewer store openings. However, those factors won't be enough to overcome the weaker sales trends. We maintain our Hold rating on Wet Seal, Inc.
Read the full analyst report on WTSLA.
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