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dELiA*s Inc announces Q1 2009 results

01 Jun '09
5 min read

SG&A expenses for the retail segment were $10.5 million, or 41.8% of sales, in the first quarter of 2009 compared to $10.7 million, or 46.7% of sales, in the prior year period, reflecting the leveraging of store selling expenses on higher sales and reductions in overhead costs. The operating loss for the first quarter for the retail segment improved to $4.9 million from $5.8 million in the prior year period.

The Company opened three store locations during the first quarter of fiscal 2009, including one relocated store, ending the period with 99 stores.

Direct Segment Results
Total revenue for the direct segment for the first quarter of fiscal 2009 increased 12.5% to $26.9 million from $23.9 million. Sales were driven by increased volume as a result of higher clearance activity following the fourth quarter holiday sales period, as well as increases in full price spring selling. Gross margin for the direct segment was 41.8% compared to 45.1% in the first quarter of the prior year due to increased clearance.

SG&A expenses for the direct segment were $11.6 million, or 43.3% of sales, compared to $12.0 million, or 50.1% of sales, in the prior year period. The significant improvement in SG&A as a percentage of sales reflects the leveraging of catalog expenses on higher sales and reductions in overhead costs. The operating loss for the first quarter for the direct segment was $0.4 million compared with a loss of $1.2 million in the prior year period.

Robert Bernard, Chief Executive Officer, commented, “We are pleased with the improvement in sales trends and traffic that we experienced in April with the Easter and Spring Break shift. That said, as we enter the second quarter we are finding that traffic has slowed, and we expect sales trends to be challenging until the beginning of the Back to School selling season.

However, we are confident in our merchandise assortment and comfortable with our retail inventory and believe we will be able to drive increased margins. We continue to be optimistic about our prospects for the year and we remain on track with our expectations to achieve break-even EBITDA for fiscal 2009. Over the long-term, we will remain focused on maximizing our growth opportunities and realizing the full potential of our dELiA*s and Alloy brands as we continue to provide an exciting and distinctive offering to our core customer.”

Supplemental Disclosures
Additional comparable historical information for the years ended January 31, 2009, February 2, 2008 and February 3, 2007 is provided in the attached tables in order to reflect the Company's former CCS business as discontinued operations.

dELiA*s Inc

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