Wet Seal Expects Growth

Joel Waller, Wet Seal's CEO, said that the company expects to "accelerate square footage growth beginning in 2007." It operated 406 stores at the end of the quarter, 314 of them Wet Seal locations and 92 in its Arden B format.

Wet Seal plans to increase its store count by about 15% per year after this year, Waller said. "We can continue with organic growth at this level until 2011 or 2012," Waller added. He said that the company sees the potential for about 600 to 700 Wet Seal stores and about 200 to 250 of its Arden B locations. "Although some of our new stores have been open just a short time, all of them are exceeding our pro forma sales for those stores," Waller noted.

As the specialty young women's retailer continued its turnaround efforts in the second quarter, its profit, which worked out to four cents per share. Its results included a credit to sales of $1.4 million associated with a customer loyalty program and other one-time events that affected the bottom line.

Wet Seal's sales for the quarter inched up to $129.5 million from $126.3 million for the same period last year, but comparable store sales for the quarter decreased 2.2% versus a 55.9% increase in the same period a year ago. Joel Waller, Wet Seal's CEO, called the results of the quarter "disappointing" for the first two months but said that the company rebounded in the third month of the quarter.