WWD.com/business-news/financial/delias-post-3q-profit-on-sales-hike-1874677/
government-trade
government-trade

Delia’s Post 3Q Profit on Sales Hike

Delia's picks up over $100M from sale of CCS skateboard catalogue business to Foot Locker.

Robust sales gains during the back-to-school season allowed Delia’s Inc. to overcome the hostile retail environment and post a third-quarter profit.

This story first appeared in the December 2, 2008 issue of WWD.  Subscribe Today.

For the quarter ended Nov. 1, the multichannel teen retailer recorded net income of $3.5 million, or 11 cents a diluted share, compared with a profit of $12,000, or zero cents a share, last year. The results for the quarter reflected the sale of the company’s CCS skateboard catalogue business on Nov. 5. Upon the close of the unit’s sale to Foot Locker Inc., Delia’s received $103.2 million in cash proceeds.

Net income from continuing operations was $941,000, or 3 cents a share, compared with a loss of $2.7 million, or 9 cents a share, a year ago. Revenues for the New York-based retailer rose 9.5 percent in the third quarter to $56.9 million from $52 million in 2007.

“We are very pleased with our improved performance for the third quarter and the b-t-s selling period, which, as we have said, we viewed as an important inflection point for our business,” said chief executive officer Robert Bernard, who added that the firm’s retail stores had posted increases in same-store sales for three consecutive quarters. “We believe that this positive momentum is largely attributable to our improved merchandise assortment and our careful edit of the Delia’s brand.”

The company, which also has direct-to-consumer operations, said revenues for the retail segment increased 19.4 percent to $32.6 million in the quarter, while direct revenues fell 1.4 percent to $24.4 million.

For the first three quarters, Delia’s reduced its loss to $5.4 million, or 17 cents a share, from a loss of $8.3 million, or 27 cents a share, last year. Sales for the nine months rose 10.4 percent to $148.4 million from $134.4 million a year ago.