Delia’s Annual Sales Down 4%
Losses continue at teen apparel cataloger/retailer Delia’s (Nasdaq: DLIA). For fiscal 2002, ended Feb. 1, Delia’s net loss before the cumulative effect of a change in accounting principle in fiscal 2002 was $34.4 million. After the positive effect of a change in accounting principle, net loss was $19.0 million. In fiscal 2001, the New York-based company lost $28.5 million.
Sales for the year fell 4%, to $137.6 million from $143.7 million in 2001. Fourth-quarter sales were up slightly, to $49.8 million from $49.0 million the previous year. Direct sales for the quarter decreased 16%, but on a 23% reduction in circulation. Retail sales increased 35%, driven by new store openings. The net loss for the quarter was $12.4 million, compared to a net loss of $6.0 million last year. Included in the net loss for the fourth quarter were facility shutdown and store impairment charges totaling $2.7 million. The company also incurred expenses of $1.6 million for inventory reserves on winter/holiday goods and costs related to recent financings.
“The fourth quarter, which represents our holiday season, continued to be impacted significantly by the same product and planning miscues that negatively affected our back-to-school and fall business,” CEO Stephen Kahn said in a statement. “Off-trend and overplanned merchandise contributed to significant margin deterioration and depressed sales throughout the fourth quarter. By mid-March, business started returning to normalized gross margins, and we are now seeing improved performance from our repositioned, market-driven product assortment in all channels.” Kahn noted that Delia’s is continuing to explore alternatives–with management and with third-party investors–to raise additional equity capital and to refinance the $2.9 million mortgage, maturing in August, on the company’s Hanover, PA, distribution facility.
Aramark’s Direct Unit Hurt by Soft Demand For its fiscal second quarter, ended March 28, Aramark Corp. (NYSE: RMK) posted sales from continuing operations of $2.24 billion, up 10% from a year ago. In the direct marketing segment, which includes the WearGuard work apparel catalog, sales in the company’s uniform and career apparel division increased 1%, to $105 million. Softness in demand was offset by the impact of a small acquisition made last year. Operating income decreased 5%, to $4.7 million, principally due to a lower margin sales mix and increased sales and marketing initiatives.
Net income for the Philadelphia-based company decreased 32%, to $43.8 million from $64.4 million last year, which included a $24.4 million after-tax gain from the sale of the company’s interest in the Boston Red Sox.. Excluding the Red Sox gain for comparison purposes, net income per share increased 16%.