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Merchandise margins improve at dELiA*s Retail
30 May '08
3 min read
"We are at an inflection point for the dELiA*s retail and direct concepts," Mr. Bernard continued. "We are transitioning from a market-based merchandise collection to a consistent, focused brand which, under Michele Martin's guidance, will reflect one vision, one edit."
Retail Segment Results:
Gross profit margin for the retail segment, which includes distribution, occupancy and merchandising costs, was 21.7% of sales compared to 19.9% in the same quarter last year. This increase was primarily attributable to an improvement of over 230 basis points in merchandise margins which was offset, in part, by the deleveraging of occupancy.
Selling, general and administrative expenses, which include allocated overhead, totaled 45.0% of sales in the first quarter as compared to 43.6% in the prior year. The increase was primarily due to increases in store depreciation and store payroll expense. The quarterly operating loss for the segment was $5.3 million versus an operating loss of $4.7 million last year.
Direct Segment Results:
Gross profit margin for the direct segment was 41.7% of sales versus 44.4% last year. The most significant factor in the decrease in gross profit margin was reduced net shipping and handling income as a result of an increased proportion of orders with free shipping and a significant increase in costs due to higher rates and fuel surcharges.
In addition, a higher proportion of clearance versus full-price merchandise also reduced merchandise margins. Selling, general and administrative expenses decreased by 350 basis points in the quarter to 37.8% from last year's 41.3%, primarily due to savings in catalog costs as a percentage of sales. Operating margins increased by 75 basis points, and operating income for the direct segment in the first quarter increased to $1.6 million as compared to $1.2 million last year.
Retail Segment Results:
Gross profit margin for the retail segment, which includes distribution, occupancy and merchandising costs, was 21.7% of sales compared to 19.9% in the same quarter last year. This increase was primarily attributable to an improvement of over 230 basis points in merchandise margins which was offset, in part, by the deleveraging of occupancy.
Selling, general and administrative expenses, which include allocated overhead, totaled 45.0% of sales in the first quarter as compared to 43.6% in the prior year. The increase was primarily due to increases in store depreciation and store payroll expense. The quarterly operating loss for the segment was $5.3 million versus an operating loss of $4.7 million last year.
Direct Segment Results:
Gross profit margin for the direct segment was 41.7% of sales versus 44.4% last year. The most significant factor in the decrease in gross profit margin was reduced net shipping and handling income as a result of an increased proportion of orders with free shipping and a significant increase in costs due to higher rates and fuel surcharges.
In addition, a higher proportion of clearance versus full-price merchandise also reduced merchandise margins. Selling, general and administrative expenses decreased by 350 basis points in the quarter to 37.8% from last year's 41.3%, primarily due to savings in catalog costs as a percentage of sales. Operating margins increased by 75 basis points, and operating income for the direct segment in the first quarter increased to $1.6 million as compared to $1.2 million last year.
dELiA*s Inc
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