US: Delia's Q3 loss narrows after sales increase
- Q3 loss narrowed to $2m
- Revenue fell 4% to $55.7m
- Gross margin rose to 33.9%
Teen apparel retailer Delia's Inc seen its third-quarter net losses narrow because of increased store sales and improved margins.
Net loss narrowed to US$2m for the quarter to 27 October, compared to a $4.4m loss the same period last year.
Revenue slipped 4% to $55.7m compared to $58.1m the prior year, while comparable store sales rose 2.4%. Retail revenue edged down 2.8% to $35.2m due to a reduction in store count, while revenue from the direct business fell 6.1% to $20.6m after catalogue sales declined 14.4%.
Gross margin increased to 33.9% compared to 32.3% the prior year.
CEO Walter Killough said: "We achieved our third consecutive quarter of positive comparable store sales and merchandise margin improvement for the retail segment. While we were pleased with the results of our back-to-school season, our sales trends slowed in late September and October."
Delia's added that Hurricane Sandy had a "significant effect" on both of its divisions but said it will have a minimal impact on fourth quarter results.
"Subsequent to the storm, sales trends improved, and we have been pleased with the strong response to our holiday assortment in both our Delia's retail and direct businesses," Killough added.
"We believe that we are well-positioned with compelling merchandise, timely inventory flow and a strong marketing program in place, and remain on track to deliver improved sales and margins as we continue to execute on our strategic initiatives."
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