Wet Seal Inc. said Thursday that first-quarter earnings may be hurt by slow clothing sales caused by "difficult" weather conditions in California.
Traders quickly began selling off the stock, at one point sending it down $7.25 a share, a 20% drop. But it regained some ground later in the day, closing at $32.25, down $3.50, almost 10%.
Nearly 2 million shares changed hands in Nasdaq trading, eight times the average daily volume.
Analysts were expecting the young-women's apparel retailer to earn 28 cents a share, or about $3 million.
Thomas Tashjian of NationsBanc Montgomery Securities said he cut his estimate to 24 cents a share, from 27 cents. During the same period last year, the 404-store chain earned 25 cents a share, or $2.7 million.
Sales at stores open at least a year will decline about 2% to 3% in the quarter ending next month, analysts said. A year ago, those so-called same-store sales surged almost 15%.