dELiA*s Inc announces first quarter results
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 2011.
Walter Killough, Chief Executive Officer, commented, "During the first quarter, the continued execution of strategic changes in merchandising and operations has resulted in improved performance in our business. In the retail segment, we delivered positive comparable store sales, with significant improvement in merchandise margins, and reduced our EBITDA loss for the quarter by over 50%. The direct segment results were in line with our expectations, and we have made good progress in redirecting our marketing spend to alternative vehicles which we believe will drive increased revenue in this segment."
Mr. Killough continued, "Earlier this week, Michele Donnan Martin stepped down from her role as President of the dELiA*s Brand. We would like to thank her for the contributions she made to the business and wish her all the best as she pursues other opportunities. During the last six weeks I have partnered with a senior merchandising consultant, who brings strong expertise in teen fashion and sourcing which we believe will help us to accelerate the changes we are making to our merchandising strategies."
Fiscal First Quarter Results
Total revenue for the first quarter of fiscal 2011 decreased 1.6% to $49.1 million from $50.0 million in the first quarter of fiscal 2010. Revenue from the retail segment increased 4.0% to $27.0 million, or 55.0% of total revenue. Revenue from the direct segment decreased 7.7% to $22.1 million, or 45.0% of total revenue.
Total gross margin increased to 33.5% in the first quarter of fiscal 2011, compared to 31.3% in the prior year quarter, driven by improved merchandise margin.
Selling, general and administrative (SG&A) expenses were $21.9 million, or 44.6% of sales, for the first quarter of fiscal 2011 compared to $23.6 million, or 47.2% of sales, in the first quarter of fiscal 2010. Excluding a pre-tax severance charge of $1.4 million, SG&A expenses were 44.3% of sales in the first quarter of fiscal 2010. The decrease in SG&A expenses in dollars also reflects reduced overhead costs, partially offset by an increase in selling and depreciation expenses.
Net loss for the first quarter of fiscal 2011 was $4.5 million, or $0.14 per diluted share, compared to a net loss for the first quarter of fiscal 2010 of $5.8 million, or $0.19 per diluted share. The net loss for the first quarter of fiscal 2010 included the aforementioned severance charge of $1.1 million, or $.04 per diluted share, on an after-tax basis.
The benefit for income taxes for the first quarter of fiscal 2011 was $1.0 million compared to a benefit for income taxes of $2.1 million for the prior year period.
Results by Segment
Retail Segment Results
Total revenue for the retail segment for the first quarter of fiscal 2011 increased 4.0% to $27.0 million from $26.0 million in the first quarter of fiscal 2010. Retail comparable store sales increased 0.9% for the first quarter of fiscal 2011 compared to a decrease of 8.6% for the first quarter of fiscal 2010.