NEW YORK (AP) -- An analyst boosted Wet Seal's rating Tuesday, saying he sees signs of progress in the teen retailer's attempt to turn around its business.
THE SPARK: Edward Yruma of KeyBanc Capital Markets raised Wet Seal Inc.'s rating to "Buy" from "Hold" and provided a price target of $6.50.
THE BACKGROUND: The Foothill Ranch, Calif., company hired a new CEO this year and has been cutting jobs and weaker stores as part of a broad restructuring following a slump in sales.
John Goodman, who came on board in January, had been a Sears executive.
Wet Seal on May 9 said sales trends in its fiscal first quarter came in better than the company expected. A key revenue metric fell 2.9 percent, while overall sales fell 5 percent to $140.4 million.
THE ANALYSIS: Yruma is upbeat because of the improvement of the sales numbers during the quarter, which ended May 4. Wet Seal reports full results from the period next week.
He now expects the company to post a profit of 1 cent per share this year, rather than a loss of 6 cents per share. Analysts polled by FactSet predict a loss of 1 cent per share for the year.
A representative for Wet Seal did not immediately respond to an email seeking comment.
SHARE ACTION: Up 13 cents, or 3 percent, to $4.41 in morning trading. The stock touched $4.67 earlier in the session, the highest level since October 2011. Shares had already gained 55 percent in 2013.