Golf Clap for Wet Seal

Wet Seal (Nasdaq: WTSL  ) reported earnings on May 28. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 4 (Q1), Wet Seal met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share dropped. GAAP earnings per share grew.

Margins expanded across the board.

Revenue details
Wet Seal reported revenue of $140.4 million. The four analysts polled by S&P Capital IQ anticipated a top line of $140.4 million on the same basis. GAAP reported sales were 5.1% lower than the prior-year quarter's $147.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.01. The five earnings estimates compiled by S&P Capital IQ averaged $0.01 per share. Non-GAAP EPS of $0.01 for Q1 were 50% lower than the prior-year quarter's $0.02 per share. GAAP EPS of $0.03 for Q1 were much higher than the prior-year quarter's $0.00 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 30.1%, 60 basis points better than the prior-year quarter. Operating margin was 3.4%, 130 basis points better than the prior-year quarter. Net margin was 2.2%, 240 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $138.7 million. On the bottom line, the average EPS estimate is $0.02.

Next year's average estimate for revenue is $578.3 million. The average EPS estimate is $0.08.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 195 members out of 231 rating the stock outperform, and 36 members rating it underperform. Among 64 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 52 give Wet Seal a green thumbs-up, and 12 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Wet Seal is outperform, with an average price target of $3.54.

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