dELiA*s Inc announces Q1 2009 results

01 Jun '09

5 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 2009. All financial results in this press release are for continuing operations unless otherwise stated.

Robert Bernard, Chief Executive Officer, commented, “Our business experienced continued positive momentum as we entered the new fiscal year with double-digit sales growth in both our retail and direct segments. In light of the current environment, we were pleased with our comparable store sales performance and improved merchandise margin in the retail business. Our careful edit of our dELiA*s brand, along with our emphasis on outfitting, continues to resonate well with our core teenage customer. In addition, we are encouraged by the improvement in top-line results in our direct business, driven by both full price and clearance sales.”

Fiscal First Quarter Results
Total revenue for the first quarter of fiscal 2009 increased 11.3% to $52.1 million from $46.8 million in the first quarter of fiscal 2008. Revenue from the retail segment increased 10.0% to $25.2 million, or 48.4% of total revenue. Revenue from the direct segment increased 12.5% to $26.9 million, or 51.6% of total revenue.

Total gross margin was 32.4% in the first quarter of fiscal 2009 as compared to 33.5% in the prior year quarter, which reflects increased clearance sales in the direct segment partially offset by an improvement in merchandise margin in the retail segment.

Selling, general and administrative (SG&A) expenses were $22.2 million, or 42.5% of sales, for the first quarter of 2009 compared to $22.7 million, or 48.5% of sales, in the first quarter of 2008. The improvement in SG&A expenses as a percentage of sales reflects the leveraging of selling expenses on higher sales in both the retail and direct segments, and reductions in overhead costs.

Results for the first quarter of 2009 reflect approximately $1.7 million of cost reductions related to the Company's recent restructuring process.

Net loss for the first quarter of fiscal 2009 improved to $3.6 million, or $0.12 per diluted share, compared to a net loss of $5.9 million, or $0.19 per diluted share, for the first quarter of fiscal 2008. Income from discontinued operations for the first quarter of 2008 was $2.0 million. Net loss for the first quarter of fiscal 2008, including the results of discontinued operations, was $3.9 million, or $0.13 per diluted share.

In addition, the Company paid approximately $23.7 million in income taxes for fiscal 2008 during the quarter, primarily related to the gain on the sale of CCS.

Results by Segment
Retail Segment Results
Total revenue for the retail segment for the first quarter of fiscal 2009 increased 10.0% to $25.2 million from $22.9 million in the first quarter of fiscal 2008. Retail comparable store sales increased 0.2% for the first quarter compared to an increase of 1.7% for the first quarter of fiscal 2008. Gross margin for the retail segment, which includes distribution, occupancy and merchandising costs, increased to 22.3% from 21.4% in the prior year period. The increase in retail segment gross margin was driven by improved merchandise margins.

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