For the quarter ended May 4, the teen specialty retailer posted a net loss of $9.2 million, or 29 cents a share, compared to a loss of $3.6 million a year ago. That was worst than the 7 cents a share loss that analysts’ predicted.
Net revenue was down 14.6% to $35.2 million. Revenue in the retail segment decreased 14.4% to $24.7 million with comparable store sales down 7.1% (and 8% fewer stores). Revenue from the direct segment decreased 15.3% to $10.5 million.
Total gross margin narrowed to 23.8% compared to 31.6% in the prior year quarter, primarily due to increased inventory reserves, as well as lower merchandise margins in the retail segment.
New CEO Named
Walter Killough commented, “We were disappointed with our first quarter performance, which we believe was the result of product offerings that did not align with our customers’ preferences coupled with a challenging retail environment underpinned by unseasonable weather,” said Walter Killough, chairman/ceo. “We have taken aggressive action to work through our current inventory and began to make adjustments to our product offerings which have already yielded improved results. With the potential disposition of Alloy, we are currently evaluating our cost structure in order to right-size the business.”
In other news, Delia’s announced that Tracy Gardner has been appointed chief executive officer effective June 5. Gardner joined Delia’s earlier this month as chief creative officer. Killough will remain as chief operating officer.
“I am excited about the opportunity to create a long term vision for the Delia’s brand,” Gardner said. While developing and executing a strategic plan will take time, I look forward to working with the team to build Delia’s into the brand we all know it can be.”