Earnings Round Up: Delia’s, American Eagle, Ascena, Guess

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Delia’s Posts Narrowed Q1 loss

New York–Delia’s narrowed its net loss for the first quarter of the year, despite a slight dip in revenue during the period.

In its quarterly report released Thursday, Delia’s posted a net loss of $4.5 million, compared to a net loss $5.8 million in the first quarter 2010.

Total revenue decreased 1.6% to $49.1 million, from $50.0 million in the prior year period. Revenue from the retail segment increased 4.0% to $27.0 million, accounting for 55.0% of total revenue. Revenue from the direct segment decreased 7.7% to $22.1 million, or 45.0% of total revenue.

Total gross margin increased to 33.5% compared to 31.3% in the prior year quarter, driven by improved merchandise margin, the company reported.

Walter Killough, chief executive officer of Delia’s, said: “During the first quarter, the continued execution of strategic changes in merchandising and operations has resulted in improved performance in our business.”

The positive comparable store sales with significant improvement in merchandise margins, helped reduced the net loss, Killough said.

“The direct segment results were in line with our expectations, and we have made good progress in redirecting our marketing spend to alternative vehicles which we believe will drive increased revenue in this segment.”

Killough added that Michele Donnan Martin stepped down from her role as president of the Delia’s brand this week.

American Eagle Outfitters Doubles Q1 Profit

Pittsburgh–Tight control of costs helped offset falling sales at American Eagle Outfitters Inc, enabling the teen apparel retailer to more than double its first-quarter profit.

For the quarter ended April 30, American Eagle reported this week a profit of $28.3 million, or 14 cents a share, up from $10.9 million, or 5 cents a share, a year earlier. The prior year’s earnings from continuing operations were 17 cents a share. In March, the company projected earnings of 13 cents to 17 cents a share.

However, revenue dropped 6% to $609.6 million, missing analysts’ average estimate expecting quarterly sales of $637 million. Same-store sales fell 8%, compared with a 5% increase a year ago.

Gross margin fell to 38% from 39.7%, as selling, general and administrative expense fell 6% to $158 million.

The company’s direct-to-consumer business–which includes ae.com, aerie.com and 77kids.com–saw a 3% sales increase. Total merchandise inventory rose 2% to $332 million.

While sales came in “lower than anticipated,” according to Jim O’Donnell, ceo, “a higher merchandise margin and the positive impact of our expense control initiatives contributed to the bottom line. During the quarter, we continued to implement strategic initiatives across our brands that will position the business for improved performance in the second half of the year and fuel longer-term, profitable growth.”

The teen-apparel retailer also forecast second quarter earnings of 10 cents to 13 cents a share and backed its full-year earnings estimate, noting that second quarter sales have improved. Analysts’ average estimate expects second quarter earnings of 13 cents a share

Ascena Retail Posts 8% Q3 Profit Hike

Suffern, NY–Ascena Retail Group Inc posted this week an 8% rise in third quarter profit thanks to solid gains across its Dressbarn, maurices and Justice brands.

The specialty apparel retailer’s net income improved to $51.8 million or 64 cents a share from $48 million or 59 cents a share last year. Adjusted net income, which excludes one-time items, advanced to $53.7 million or 66 cents a share  from $49 million or 60 a share last year.

Net sales grew 9% to $722.8 million from $665.5 million last year, primarily due to across-the-board increases in comparable store sales, as well as strong growth in e-commerce sales. Gross profit margin improved to 44.4% from 43.8% last year. Comparable store sales increased 6%.

Analysts’ average expectations were for earnings 65 cents a share on revenues of $709.60 million.

“In each of our concepts, we have focused on providing a compelling value proposition to consumers, the success of which is reflected by our continued, across-the-board comparable store sales increases,” said David Jaffe, ceo. “As we go forward, we are mindful that today’s consumer is under increasing pressure. We are confident that we have struck the right balance of merchandise and pricing and will continue to do so.”

By division, net sales for dressbarn increased 5% to $255.4 million, while maurices’ improved 17% to $208.2 million from last year. Net sales for Justice increased 6% to $259.2 million for the quarter from last year.

Looking ahead, the company reaffirmed its full-year 2011 earnings guidance range of $2.28 to $2.33 a share. Analysts’ average estimates expect earnings of $2.33 a share for fiscal

Guess Q1 Sales Beat Expectations, But Profit Falls 15.2%

Los Angeles—Guess Inc. reported this week that its first quarter sales beat expectations, but its earnings fell 15.2% from the same quarter in the prior year.

The jeans maker said that total revenue increased 10% to $592.2 million, beating analysts’ average estimates for $567.7 million. Growth in Asia, where revenue rose 24%, drove the increase. Revenue in Europe also helped, rising 12%. While revenue in North America was the weakest, rising 5%.

But net income fell to $42.7 million, or 46 cents per share, in the quarter ended April 30, compared with $50.3 million, or 54 cents per share, a year earlier. Excluding charges, the company said it made 37 cents per share. Analysts’ average estimate expected earnings  of 44 cents.

Guess said operating margin declined 120 basis points to 12.0%, compared to the prior-year quarter, primarily reflecting the impact of higher store occupancy expenses to support its expansion of retail businesses in Europe and North America.

Although Paul Marciano, ceo, said he was pleased with the results, some of the revenue increase apparently came from newly opened stores. Comparable store sales fell 3%.

Marciano said the retailer is focused on controlling inventory and costs, and that the year “is not without its challenges. Our entire industry is experiencing rising commodity and input costs and there remains uncertainty in many economies around the world.”

The company narrowed its full year forecast, predicting $2.74 billion to $2.8 billion, after previous predictions of $2.72 billion to $2.82 billion. But maintained its earnings forecast of $3.30 to $3.50 per share. Analysts’ average estimate expect full year earnings of $3.39 a share on sales of $2.7 billion.

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