Wet Seal Shares Rise on Results

Teen-oriented retailer Wet Seal Inc. reported a narrower loss Friday for its fiscal first quarter, sending its shares up nearly 9%.

The company, based in Foothill Ranch, has closed more than 150 of its namesake stores in hopes of returning to profitability.

Wet Seal lost $8.6 million, or 23 cents a share, in the quarter ended April 30, compared with a loss of $20 million, or 66 cents, a year earlier.

Analysts, on average, had expected a loss of 41 cents a share, according to Reuters Estimates.

Results for the latest quarter include a $5.2-million charge for the store closures.

In August, analysts questioned whether Wet Seal would have to file for bankruptcy protection after it reported steep losses that left it with little cash on hand. But the firm has since closed 153 Wet Seal stores, including 101 in the latest quarter, secured $40 million in financing and brought in a new chief executive, Joel Waller, its third in two years.

The company, which had 307 Wet Seal stores as of April 30, also operates 91 stores in its Arden B. chain.

Revenue in the latest quarter rose 3.9% to $103.8 million, even with fewer stores. Sales at stores open at least a year rose 29.8%.

Wet Seal said it held $46.4 million in cash April 30, a decline of $25.3 million from Jan. 31. The drop came from lease termination payments, inventory buildup and new-store development costs, the company said.

The retailer said it would not provide financial forecasts.

Wet Seal shares rose 34 cents to $4.19. The stock had closed as low as 74 cents in August, when worries over a potential bankruptcy filing peaked.