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DELiA*s, Inc. Announces Third Quarter 2010 Results

dELiA*s, Inc. (NASDAQ: DLIA), a direct marketing and retail company comprised of two lifestyle brands primarily targeting teenage girls and young women, today announced the results for its third quarter of fiscal 2010.

Walter Killough, Chief Executive Officer, commented, “During the third quarter, we experienced a sequential improvement in sales trends in both the retail and direct segments. The improvement in our businesses that we began to see in August continued through the remainder of the quarter. In retail, while traffic has remained inconsistent, we have improved our sales execution which has resulted in increased conversion rates. As a result, we were able to deliver positive comparable store sales performance for the last two months of the quarter.”

Mr. Killough continued, “This positive sales performance has continued into the month of November. At the same time, we realize that in order to become profitable we need to continue to rationalize our expense structure. As a result, we have identified $8 million in annualized expense savings that we have begun to implement in the fourth quarter of 2010, with a total targeted reduction of over $10 million in expenses for fiscal 2011.”

Fiscal Third Quarter Results

Total revenue for the third quarter of fiscal 2010 increased 1.5% to $60.6 million from $59.7 million in the third quarter of fiscal 2009. Revenue from the retail segment increased 5.6% to $37.2 million, or 61.4% of total revenue. Revenue from the direct segment decreased 4.5% to $23.4 million, or 38.6% of total revenue.

Total gross profit was 34.3% in the third quarter of fiscal 2010 as compared to 36.5% in the prior year quarter, predominantly reflecting lower merchandise margins in both segments and the deleveraging of occupancy costs.

Selling, general and administrative (SG&A) expenses were $24.5 million, or 40.3% of sales, for the third quarter of 2010 compared to $23.7 million, or 39.6% of sales, in the third quarter of 2009. The increase in SG&A as a percent of sales reflects the deleveraging of overhead expenses.

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