NEW YORK — Wet Seal Inc. on Thursday posted significantly smaller net losses for the fourth quarter and full year.
In the three months ended Jan. 28, Wet Seal had a net loss of $2.8 million, or 5 cents a diluted share, versus a loss of $47.8 million, or $1.31, in the year-ago quarter. Results in the most recent quarter included a non-cash stock compensation charge, certain non-cash interest charges and an asset impairment charge.
Analysts had been expecting a profit of 3 cents before exceptional items.
Operating income in the quarter was $684,000, versus an operating loss of $45.5 million a year ago.
Fourth-quarter net sales were $141.4 million, an increase of 18.6 percent. Comparable-store sales jumped 44.6 percent, the company said, and noted that comps were partially offset by the closure of 154 Wet Seal stores in January and February 2005.
In the full year, Wet Seal posted a loss of $29.5 million, or $1.19, compared with a loss of $198.3 million, or $5.89, a year ago. Net revenues in the full-year were $500.8 million, up 15 percent from $435.6 million last year.
"We were pleased to see improvements in merchandise margins due to a significantly lower overall markdown rate that resulted from stronger product assortment," Joel Waller, the retailer's chief executive officer, said Thursday in a written statement. "Our primary goal in fiscal 2006 is to make further improvements in operating income rates, and we now have ample evidence that we are in a position to begin to open new locations to drive growth in sales and in profits."
The company plans to open 20 to 25 stores in the new fiscal year while in 2007 the store count is expected to rise by 15 to 20 percent; capital expenditures are seen at $15 million to $17 million in the new fiscal year. Wet Seal currently operates 308 Wet Seal stores and 92 Arden B. sites.
Looking ahead, the company forecast same-store sales to rise in the mid-single digits in fiscal 2006.
The retailer released its results after the stock market closed. Shares of Foothill Ranch, Calif.-based Wet Seal closed up 2.6 percent at $5.98 in Thursday's Nasdaq trading. The shares, however, fell as much as 8 percent in the after-market session.
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