Shares of Wet Seal Inc., the nation's largest operator of mall-based stores catering to the bubble-gum set, plunged 29% on Thursday after the company said its fiscal second-quarter earnings would fall short of estimates.
The junior women's apparel retailer, which operates 368 Wet Seal and Contempo Casuals shops in 35 states, said it expects to report a profit of 25 cents a share for the three months ended Aug. 2, unchanged from a year earlier, on lower revenue.
Analysts had projected earnings of about 29 cents a share for the Irvine company.
Wet Seal's stock sank $7.69 a share Thursday to close at $19, making it the second-biggest loser in U.S. markets in percentage terms. A total of 6.55 million shares changed hands on the Nasdaq market, 33 times the company's three-month daily trading average of about 198,400.
The company's sales were $94.3 million in the second quarter, down from $94.4 million a year before. Sales for stores open more than a year--a common benchmark of a retailer's financial health--fell 1.6%.
"Our sales performance specifically in the month of July was below our expectations," said Wet Seal Chief Executive Kathy Bronstein. Sales of dresses, normally a big item for the company during the spring and summer, were particularly weak, she said.