dELiA*s, Inc. (NASDAQ:DLIA), a multi-channel retail company primarily marketing to teenage girls, today announced the results for its third quarter of fiscal 2013.
dELiA*s, Inc. results for all periods presented reflect its former Alloy business as a discontinued operation. All financial results in this press release are for continuing operations only unless otherwise stated.
Third Quarter Fiscal 2013 Highlights:
- Total revenue decreased 28.9% to $33.0 million from $46.4 million in the third quarter of fiscal 2012. Revenue from the retail segment decreased 30.9% to $24.3 million, including a comparable store sales decrease of 22.9%. Revenue from the direct segment decreased 22.6% to $8.7 million.
- Consolidated gross margin was 12.9% compared to 32.8% in the prior year quarter, primarily due to increased inventory reserves and lower merchandise margins in connection with clearing legacy product, as well as the deleveraging of occupancy costs.
- Stockholders ratified the issuance of $21.8 million of convertible notes and approved the issuance of 20.7 million shares of common stock upon conversion of the notes.
- Loss from continuing operations was $19.3 million, including $3.3 million in non-cash store impairment charges and $2.9 million in non-cash charges related to the note conversion, compared to a loss from continuing operations for the third quarter of fiscal 2012 of $2.1 million.
Tracy Gardner, Chief Executive Officer, commented, "While we expected the third quarter to be tough, our results were further pressured by a challenging retail environment. We significantly reduced inventory levels by taking aggressive markdowns in order to work through underperforming legacy merchandise. However, we were encouraged by the strong customer response to the newness we have been able to deliver thus far. We plan to continue to bring in new product that is more differentiated to the dELiA*s customer in December and more notably in the first quarter. Overall, our new merchandising and marketing teams are working diligently to develop a stronger brand image and merchandise assortment that resonates with our girl. We believe this turnaround will take time, but remain confident in the long term potential of the dELiA*s brand.”