Revenue from retail segment up at dELiA*s

27 Nov '10

5 min read

Results by Segment

Retail segment results
Total revenue for the retail segment for the third quarter of fiscal 2010 increased 5.6% to $37.2 million from $35.2 million in the third quarter of fiscal 2009. Retail comparable store sales decreased 0.4% for the third quarter of fiscal 2010 compared to a decrease of 3.6% for the third quarter of fiscal 2009.

Gross profit for the retail segment, which includes distribution, occupancy and merchandising costs, was 29.3% compared to 30.9% in the prior year period. The decrease in gross profit was driven by lower merchandise margins and the deleveraging of occupancy costs.

SG&A expenses for the retail segment were $12.9 million, or 34.6% of sales, in the third quarter of fiscal 2010 compared to $12.1 million, or 34.4% of sales. The increase in SG&A dollars was driven by increased store count and overhead expenses.

The operating loss for the third quarter of fiscal 2010 for the retail segment increased to $1.9 million from a loss of $1.2 million in the prior year period.

The Company had no store openings or closings during the third quarter of fiscal 2010 and ended the period with 115 stores.

Direct segment results
Total revenue for the direct segment for the third quarter of fiscal 2010 decreased 4.5% to $23.4 million from $24.5 million in the prior year period.

Gross profit for the direct segment was 42.2% in the third quarter of fiscal 2010 compared to 44.5% in the prior year period, driven by lower merchandise margins.

SG&A expenses for the direct segment were $11.6 million, or 49.5% of sales, in the third quarter of fiscal 2010, compared to $11.6 million, or 47.2% of sales, in the prior year period. The increase in SG&A as a percentage of sales reflects the deleveraging of selling and overhead expenses.

The operating loss for the third quarter of fiscal 2010 for the direct segment was $9.3 million, including the goodwill impairment charge of $7.6 million, compared with a loss of $0.7 million in the prior year period.

First nine month results
For the nine month period ended October 30, 2010, total revenue decreased 2.4% to $153.8 million from revenue of $157.6 million for the prior year period. Total gross profit was 31.7% compared to 34.0% for the prior year period. SG&A expenses were $69.6 million, or 45.2% of sales, for the first nine months of fiscal 2010, compared to $67.7 million, or 43.0% of sales, for the prior year period.

Net loss for the first nine months of fiscal 2010 increased to $22.3 million, or $0.72 per diluted share, compared to a net loss of $9.6 million, or $0.31 per diluted share, for the first nine months of fiscal 2009. The net loss for the first nine months of fiscal 2010 included an after-tax severance charge of $1.1 million, or $0.04 per diluted share, recorded in the first quarter, and the aforementioned goodwill impairment charge of $7.6 million, or $0.24 per diluted share, recorded in the third quarter of fiscal 2010.

The Company continues to expect year-end cash, including restricted amounts, to range from $35 million to $40 million.

dELiA*s Inc

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