Shares of dELiA*s, Inc. (DLIA), a direct marketing and retail company
comprised of three lifestyle brands primarily targeting consumers
between the ages of 12 and 19, surged after the Company reported
its financial results for the second quarter ended August 2, 2008.
Total revenue increased 10.8% to $58.1 million from $52.4 million in
the second quarter of fiscal 2007. Revenue from the retail segment
increased 22% to $23.6 million, or 40.6% of total revenue. The net loss for the second
quarter of fiscal 2008 was $5.0 million, or $0.16 per diluted share, as compared
to a net loss of $5.1 million, or $0.16 per diluted share, in the second quarter of fiscal 2007. Robert
Bernard, CEO of dELiA*s, commented in a conference call, “Our efforts to drive improvements in our
business resulted in positive top line and margin growth across both segments. Our performance was
largely driven by top line and profit improvements in the dELiA*s brand; continued improvements in
overall full price sale of merchandise in all of our businesses; improved ability to realize higher initial
markups and merchandise product margins; and leveraging of our expenses, including investments
in overhead during Q1.” He added, “We are also pleased with our important back-to-school selling
period so far, with low double-digit comparable sales growth and increased margins for July and August.
We are seeing a better response from our customers to our improved merchandise selections.
Our brand focus is beginning to yield tangible results, and we are well positioned for the rest of the
year in these challenging economic times.” Walter Killough, COO of dELiA*s, explained, “We made
good progress in our strategic initiatives to improve operations and inventory management processes
in order to expand margins in Q2. We feel that the investments we made in previous quarters are
beginning to show measurable results. We are experiencing positive traction, but we believe that we
still have more upside in achieving the goals that we have set for ourselves. We expect that upon
achievement of our goals, we will be in an excellent position to drive top and bottom line growth. We
now have a much stronger foundation in place to drive that growth.” Friday, CL King upgraded DLIA
to Strong Buy from Neutral and set a target of $4.
$2.56 (09/01/08)
