Nomura Securities Maintains a 'Neutral' on Wet Seal, Inc. (WTSLA); Lowering Estimates
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Price: $2.95 -2.64%
Rating Summary:
1 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
1 Buy, 3 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Nomura Securities maintains a 'Neutral' on Wet Seal, Inc. (NASDAQ: WTSLA).
Nomura analyst, Paul Lejuez, said, "On her first conference call yesterday, new CEO Sue McGalla outlined a plan to help improve top-line by gaining a better understanding of their core customers (which will to help improve the merchandise assortment), as well as increase productivity of associates and in-store execution. So far, we like the direction that McGalla is taking the business, which started with her decision in March to cut back on store growth plans in FY11, which will allow the organization to focus all efforts on improving productivity in existing stores. However, we are reducing our FY11E from $0.20 to $0.18 to reflect our lower 2QE. We now expect 2Q EPS of $0.02 (vs. prev $0.04) based on comps +4-6%, below our prev est of +6-8%, taking into account that current 2Q trends have slowed from 1Q +7%. The stock is not expensive trading at 5.7x our FY12 EBITDA (vs. the group at 6.7x), but we remain on the sidelines owing to likely pressure from higher input costs and competition. We are biased positive if McGalla can drive more consistency in results."
For more ratings news on Wet Seal, Inc. click here and for the rating history of Wet Seal, Inc. click here.
Shares of Wet Seal, Inc. closed at $4.70 yesterday.
Nomura analyst, Paul Lejuez, said, "On her first conference call yesterday, new CEO Sue McGalla outlined a plan to help improve top-line by gaining a better understanding of their core customers (which will to help improve the merchandise assortment), as well as increase productivity of associates and in-store execution. So far, we like the direction that McGalla is taking the business, which started with her decision in March to cut back on store growth plans in FY11, which will allow the organization to focus all efforts on improving productivity in existing stores. However, we are reducing our FY11E from $0.20 to $0.18 to reflect our lower 2QE. We now expect 2Q EPS of $0.02 (vs. prev $0.04) based on comps +4-6%, below our prev est of +6-8%, taking into account that current 2Q trends have slowed from 1Q +7%. The stock is not expensive trading at 5.7x our FY12 EBITDA (vs. the group at 6.7x), but we remain on the sidelines owing to likely pressure from higher input costs and competition. We are biased positive if McGalla can drive more consistency in results."
For more ratings news on Wet Seal, Inc. click here and for the rating history of Wet Seal, Inc. click here.
Shares of Wet Seal, Inc. closed at $4.70 yesterday.
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