A Waddling Wet Seal: Fool by Numbers
By Motley Fool Contributors
March 30, 2007
Recommended (4)
On March 29, teen retailer The Wet Seal (Nasdaq: WTSLA) released earnings for the fourth quarter ended Feb. 3.
- Revenue increased 17.7% to $166.4 million, with a 3.1% increase in comparable-store sales.
- Margins were a mixed bag, with stale gross margins and a drop in net margin. On a more positive note, operating margin showed an increase of 250 basis points.
- The company opened 14 new stores -- net of closings -- for a total of 430 operating stores, and expects to open 58 to 62 new stores during fiscal 2007.
- Wet Seal has been left on the clearance rack, along with Hot Topic (Nasdaq: HOTT), by the community in Motley Fool CAPS, our free interactive stock database, with each earning only a one-star rating. Meanwhile, dELiA*s (Nasdaq: DLIA) is the new teen trend, with a four-star rating, followed closely by three stars for Urban Outfitters (Nasdaq: URBN) and Tween Brands (NYSE: TWB).
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q4 2006
|
Q4 2005
|
Change
|
|
Sales
|
$166.4
|
$141.4
|
17.7%
|
|
Net Profit
|
($5.7)
|
($2.9)
|
N/A
|
|
EPS
|
($0.07)
|
($0.06)
|
N/A
|
|
Diluted Shares
|
79.3
|
52.5
|
51.0%
|
Get back to basics with the income statement.
Margin Checkup
|
Q4 2006
|
Q4 2005
|
Change*
|
|
Gross Margin
|
33.6%
|
33.6%
|
0.0
|
|
Operating Margin
|
2.9%
|
0.4%
|
2.5
|
|
Net Margin
|
(3.4%)
|
(2.0%)
|
(1.4)
|
*Expressed in percentage points
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
Q4 2006
|
Q4 2005
|
Change
|
|
Cash + ST Invest.
|
$105.3
|
$96.8
|
8.7%
|
|
Accounts Rec.
|
N/A
|
N/A
|
N/A
|
|
Inventory
|
$34.2
|
$25.5
|
34.4%
|
|
Liabilities
|
Q4 2006
|
Q4 2005
|
Change
|
|
Total Accounts Payable
|
$21.2
|
$23.8
|
(11.0%)
|
|
Long-Term Debt
|
$0.0
|
$8.0
|
(100.0%)
|
The balance sheet reflects the company's health.
Cash Flow Highlights
Wet Seal must be trying on new spring merchandise because it forgot to include a cash flow statement in the press release.
Free cash flow is a Fool's best friend.
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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.
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