dELiA*s posts first quarter results

28 May '10

4 min read

dELiA*s, Inc., a direct marketing and retail company comprised of two lifestyle brands primarily targeting teenage girls and young women, announced the results for its first quarter of fiscal 2010.

Walter Killough, Chief Executive Officer, commented, "Our first quarter sales results, while disappointing, were in line with our recent expectations. Sales trends in both our retail and direct businesses were negative to last year, however, we are pleased with our ending inventory and cash positions."

Fiscal First Quarter Results
Total revenue for the first quarter of fiscal 2010 decreased 4.1% to $50.0 million from $52.1 million in the first quarter of fiscal 2009. Revenue from the retail segment increased 3.0% to $26.0 million, or 52.0% of total revenue. Revenue from the direct segment decreased 10.7% to $24.0 million, or 48.0% of total revenue.

Total gross margin was 31.3% in the first quarter of fiscal 2010, compared to 32.4% in the prior year quarter, reflecting the deleveraging of occupancy costs partially offset by an increase in merchandise margin.

Selling, general and administrative (SG&A) expenses were $23.6 million, or 47.2% of sales, for the first quarter of fiscal 2010 compared to $22.2 million, or 42.5% of sales, in the first quarter of fiscal 2009. Included in the first quarter of fiscal 2010 is a pre-tax severance charge of $1.4 million. SG&A excluding the aforementioned severance charge was $22.1 million, or 44.3% of sales. The increase in SG&A as a percent of sales reflects the deleveraging of selling, depreciation and overhead expenses.

Net loss for the first quarter of fiscal 2010 was $5.8 million, or $0.19 per diluted share, compared to a net loss for the first quarter of fiscal 2009 of $3.6 million, or $0.12 per diluted share. The net loss for the first quarter of fiscal 2010 includes the aforementioned after-tax severance charge of $1.1 million, or $0.04 per diluted share. The benefit for income taxes for the first quarter of fiscal 2010 was $2.1 million compared to a benefit for income taxes of $1.7 million for the prior year period.

Results by Segment

Retail Segment Results
Total revenue for the retail segment for the first quarter of fiscal 2010 increased 3.0% to $26.0 million from $25.2 million in the first quarter of fiscal 2009. Retail comparable store sales decreased 8.6% for the first quarter of fiscal 2010 compared to an increase of 0.2% for the first quarter of fiscal 2009. Gross margin for the retail segment, which includes distribution, occupancy and merchandising costs, was 19.6% compared to 22.3% in the prior year period. The decline in gross margin was primarily due to the deleveraging of occupancy costs.

SG&A expenses for the retail segment, which include a severance charge of $0.7 million, were $11.8 million, or 45.3% of sales, in the first quarter of fiscal 2010 compared to $10.5 million, or 41.8% of sales, in the prior year period. The increase in SG&A as a percent of sales reflects deleveraging of selling expenses. The operating loss for the first quarter of fiscal 2010 for the retail segment, adjusted to exclude the aforementioned severance charge, was $5.9 million compared to $4.9 million in the prior year period.

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