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dELiA*s achieves flat YOY comparable store sales
25
Nov '09
dELiAs, Inc., a direct marketing and retail company comprised of two lifestyle brands primarily targeting teenage girls and young women, today announced the results for its third quarter of fiscal 2009. All financial results in this press release are for continuing operations unless otherwise stated.

Robert Bernard, Chief Executive Officer, commented, “During the third quarter we continued our trend of improved operating results, while reducing inventory levels, controlling costs and preserving cash. We achieved flat year-over-year comparable store sales and expanded merchandise margin in the retail segment for the August through September Back-to-School period. However, we experienced weak sales performance in both segments of the business in October, which intensified during the last two weeks of the month and drove our negative comparable store sales results for the quarter in our retail segment.”

Fiscal Third Quarter Results

Total revenue for the third quarter of fiscal 2009 increased 4.9% to $59.7 million from $56.9 million in the third quarter of fiscal 2008. Revenue from the retail segment increased 8.2% to $35.2 million, or 59.0% of total revenue. Revenue from the direct segment increased 0.5% to $24.5 million, or 41.0% of total revenue.

Total gross margin was 36.5% in the third quarter of fiscal 2009, compared to 37.0% in the prior year quarter, reflecting increased clearance sales in the direct segment partially offset by improved inventory management.

Selling, general and administrative (SG&A) expenses were $23.7 million, or 39.6% of sales, for the third quarter of 2009 compared to $23.8 million, or 41.9% of sales, in the third quarter of 2008. The improvement in SG&A as a percent of sales was a result of reduced overhead costs.

The operating loss for the third quarter of 2009 was $1.9 million, an improvement of approximately $1.5 million, or 43.4%, from an operating loss for the third quarter of 2008 of $3.4 million. The operating loss in the third quarter of 2008 included a noncash impairment charge of $0.6 million related to an underperforming store location.

Net loss for the third quarter of fiscal 2009 was $1.3 million, or $0.04 per diluted share, compared to net income of $0.8 million, or $0.03 per diluted share, for the third quarter of fiscal 2008. The benefit for income taxes for the third quarter of 2009 was $0.7 million compared to a benefit for income taxes of $4.4 million for the prior year period.

Income from discontinued operations for the third quarter of 2008 was $2.7 million. Net income for the third quarter of fiscal 2008, including the results of discontinued operations, was $3.5 million, or $0.11 per diluted share.

Retail Segment Results

Total revenue for the retail segment for the third quarter of fiscal 2009 increased 8.2% to $35.2 million from $32.6 million in the third quarter of fiscal 2008. Retail comparable store sales decreased 3.6% for the third quarter of fiscal 2009 compared to an increase of 7.6% for the third quarter of fiscal 2008. Gross margin for the retail segment, which includes distribution, occupancy and merchandising costs was 30.9% compared to 30.0% in the prior year period. Gross margin was driven by an increase in merchandise margin and improved inventory management.


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