As a result, he estimates a comp-store sales decrease to the high single digits for May, due to the lack of inventory and to the strength of prior year increases. This first-quarter's 20% increase in comp-store sales follows a nearly 30% increase for the opening quarter of 2005, he noted. Comp-store sales "should be better for the back half of this year," Waller said, "when comparisons with last year get easier."

As for fashion inventory, he said, "we had lots and lots of inventory problems, including shipment delays, and we're catching up quickly. We've had to add vendors to catch up, and we expect to be fully stocked sometime in middle or late June."

Meanwhile, expansion strategies for both the Wet Seal and Arden B brands are on track. As of April 29, there were 309 Wet Seal and 92 Arden B locations. Between 20 and 25 units will be added this year, and Waller said the company anticipates an increase of 15% sf growth annually heading eventually to between 600 and 700 West Seal units and between 200 to 250 Arden Bs.

The Arden B loyalty program was altered in first quarter. An expiration was added to the program and the terms were changed. Now, program members receive $20 in merchandise for every $200 spent, down from $50 in merchandise for every $250 spent.

Aggregate net sales for the company in first quarter were $125.1 million, compared with $103.8 million for the same quarter of the previous year. Waller noted that first-quarter "traditionally generates our lowest level of sales."

Sales of sweaters in Arden B stores "were weak," he said, "and there was not enough variety in bottoms." Sales of leggings "moderated" during first quarter. "We expect them to perform better during back-to-school," he said. While fashion tops and dresses are expected to be in continuing demand through the back-to-school season, denim is also expected to do well. "We think it's as important this year as last," Waller said, "and we will have more of it in stores this year than last. Denim is one of our back-to-school focuses."

Gross profit for the chain increased to $46.8 million in first-quarter 2006, up from $32.6 million in the same quarter of 2005. Gross profit as a percent of sales increased six percentage points to 37.4%. "We continue to refine merchandising strategies," Waller concluded. Emphasis will be on "improved merchandise margins, more imports, and a drive for higher average margins."