Wet Seal Inc.
is set to report its fourth quarter fiscal 2013 results on Mar
21. Last quarter, it posted a loss of 11 cents; narrower than the
Zacks Consensus Estimate of a loss of 13 cents per share. Let's
see how things are shaping up for this announcement.
Growth Factors this Past Quarter
Wet Seal posted a loss of 11 cents per share compared with
earnings of 5 cents per share in the year ago quarter due to
lower comparable store sales and spending by domestic
Wet Seal's sales came down 10.9% in the quarter due to lower
sales at both Arden B and Wet Seal stores. Although management is
working to improve sales and increase penetration in the
e-commerce business, higher costs related to incremental
marketing expenses and macroeconomic headwinds are expected to
adversely affect comps even during the fourth quarter.
The Zacks Consensus Estimate for the fourth quarter stands at
a loss of 6 cents while that for fiscal 2013 is pegged at a loss
of 22 cents.
Wet Seal surpassed the estimates in all the preceding four
quarters with a trailing four-quarter average positive surprise
One out of four estimates was revised upward in the last 60
days. However, the Zacks Consensus Estimate has remained
unchanged for the fourth quarter as well as for 2013. The lack of
movement in estimates indicates a lack of catalysts during the
quarter, meaning that the company is likely to report in line
Moreover, the stock carries a Zacks Rank #3 (Hold).
We caution against stocks with Zacks Ranks #4 and #5 (Sell
rated stocks) going into the earnings announcement, especially
when the company is seeing a negative estimate revision
Other Stocks to Consider
Our model states that a stock needs to have both a positive
earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, #2 or #3 to beat earnings estimates.
You could, therefore, consider stocks like:
) , with Zacks Earnings ESP of 3.03% and a Zacks Rank #2 (Buy);
General Mills Inc.
) with Zacks Earnings ESP of 1.75% and a Zacks Rank #3 (Hold) and
New York & Company Inc.
) with Zacks Earnings ESP of 12.5% and a Zacks Rank #2 (Buy).
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WET SEAL INC -A (WTSL): Free Stock Analysis
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