Third Quarter Fiscal 2012 Highlights:
Walter Killough, Chief Executive Officer, commented, “We achieved our third consecutive quarter of positive comparable store sales and merchandise margin improvement for the retail segment. While we were pleased with the results of our back-to-school season, our sales trends slowed in late September and October.
“Hurricane Sandy also had a significant effect on both segments of our business during the first week of the new quarter, although we expect its impact on our overall fourth quarter results to be minimal. Subsequent to the storm, sales trends improved, and we have been pleased with the strong response to our Holiday assortment in both our dELiA*s retail and direct businesses.
“We believe that we are well-positioned with compelling merchandise, timely inventory flow and a strong marketing program in place, and remain on track to deliver improved sales and margins as we continue to execute on our strategic initiatives.”
Retail Segment Results
Total revenue for the retail segment for the third quarter of fiscal 2012 decreased 2.8% to $35.2 million from $36.2 million in the third quarter of fiscal 2011 due to a reduction in store count. Retail comparable store sales increased 2.4% for the third quarter of fiscal 2012 compared to a decrease of 1.7% for the third quarter of fiscal 2011.
Gross margin for the retail segment, which includes distribution, occupancy and merchandising costs, was 29.7% for the third quarter of fiscal 2012 compared to 26.0% in the prior year period. The increase in gross margin resulted primarily from higher merchandise margins, driven by increased full price selling and fewer markdowns, and the leveraging of reduced occupancy costs.
Selling, general and administrative (SG&A) expenses for the retail segment were $11.6 million, or 33.1% of sales, in the third quarter of fiscal 2012 compared to $12.1 million, or 33.5% of sales, in the prior year period. The decrease in SG&A expenses in dollars resulted from reduced selling and depreciation expenses.
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