The fashion marketer to teens and young adults rubber-stamped Wall Street’s estimates that operating losses for the fourth quarter would tally 2 cents a share and come to a 45 cent deficit for the full year. Delia’s, based here, merchandises fashion goods and home furnishings to girls and young women via catalogs, delias.com and 37 stores.
A noncash charge to settle a class action brought against Delia’s by shareholders back in August 2000 will be applied to the firm’s fourth and first quarter results. The suit stemmed from the valuation used in the acquisition of Delia’s by iTurf Inc., which later took on the Delia’s name, as reported. Delia’s will issue and deliver one million shares, adjusted if necessary, to provide a minimum settlement of $3.25 million to the plaintiff class.
For 2002, Delia’s is anticipating net income of roughly $3.25 million, with most of the gains expected from the addition of 20 retail stores, as sales hit about $170 million. “Modest growth” is expected from Delia’s direct division, the company said in a statement. Delia’s expects first-half losses this year will be offset by earnings in the back half, with net income estimated to reach $2.6 million in the third quarter and $7.55 million in the fourth fiscal period.
Capital spending, mostly for the 20 new stores, is set at about $10 million for the 12 months.
In 2003, Delia’s expects to open 30 additional stores, producing sales growth of “at least” 25 to 30 percent and profits of $12 million to $13 million.
On Monday, shares of Delia’s added 8 cents to close at $8 in Nasdaq trading, just 5 cents shy of their 52-week high, despite a 2.9 percent dip in the Nasdaq to 1,855.5. ITurf went public at $60 a share in April 1999.