The Wet Seal Inc, a leading specialty retailer to young women, announced results for its first fiscal quarter ended April 29, 2006.
The Company reported a quarterly net loss of $13.7 million, or $0.22 per diluted share. These results included a non-cash interest charge of $18.1 million associated with conversions of the Company's convertible notes, a non-cash charge of $5.6 million for stock compensation, a charge of $0.7 million for severance, and a $0.4 million reduction to store closure reserves.
The Company also modified the terms of its Arden B division's customer loyalty program, resulting in a credit of $2.3 million to reduce the deferred sales balance associated with the program. Before the effect of these charges and credits, net income was $8.0 million, or $0.09 per diluted share, and operating income was $8.1 million, or 6.6 percent of net sales.
These results compare to a prior year first quarter net loss of $8.6 million, or $0.23 per diluted share, and a quarterly operating loss of $6.8 million, which included charges of $5.2 million for store closure costs and $0.5 million for non-cash stock compensation.
During the 13 weeks ended April 29, 2006, the Company opened two Wet Seal stores and closed one Wet Seal store. At April, 29, 2006, the Company operated 309 Wet Seal stores and 92 Arden B stores.
Financial and Operating Summary for the 13-Week Period Ended April 29, 2006
Net sales for the 13 weeks ended April 29, 2006 were $125.1 million, compared with net sales of $103.8 million for the comparable prior year period, a 20.5 percent increase. Sales increased over the prior year's quarter primarily due to a 20.0 percent increase in comparable store sales.
marketing@alchempro.com
