Second Quarter Fiscal 2013 Highlights:
- Total revenue decreased 16.7% to $33.2 million from $39.8 million in the second quarter of fiscal 2012. Revenue from the retail segment decreased 14.7% to $24.5 million, including a comparable store sales decrease of 14.9%. Revenue from the direct segment decreased 21.8% to $8.7 million.
- Consolidated gross margin was 20.9% compared to 31.6% in the prior year quarter, primarily due to increased inventory reserves, lower merchandise margins associated with higher markdowns on legacy product and the deleveraging of occupancy costs.
- Loss from continuing operations was $11.1 million compared to a loss from continuing operations for the second quarter of fiscal 2012 of $5.4 million. Overhead expenses previously allocated to the Alloy business have now been reallocated to continuing operations for both fiscal 2013 and 2012. These costs were approximately $1.2 million for the second quarter of fiscal 2013.
- The Company closed an underwritten follow-on public offering of its common stock with proceeds of approximately $14.8 million, net of underwriting discounts and commissions, as well as a private placement of convertible notes that, subject to approval of stockholders, will provide proceeds of approximately $20.3 million, net of placement agent fees.
Tracy Gardner, Chief Executive Officer, commented, “Our second quarter results were indicative of challenging traffic trends, combined with the underperformance of our legacy inventory. We expect these trends to continue throughout the third quarter as we work to move through this inventory.
"The team is currently focused on stabilizing the business, amplifying the dELiA*s brand image and driving improved execution in the near term. During this period, we are also focused on implementing our go forward strategy that we believe will better position us for more consistent long term growth. While we acknowledge that this turnaround will take time, we remain excited about our future potential.”
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