On March 29, teen retailer The Wet Seal
- 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.
Related Foolishness:
- Wet Seal's Looking Better: Fool by Numbers
- 7 Surprising 1-Star Stocks
- Wet Seal Lumbers On to the Next Step
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