USB Piper Cuts Delia's to 'Outperform'
USB Piper downgraded Delia's (DLIA ) to outperform from strong buy.
Analyst Jeffrey Klinefelter says he downgraded amid a sharp decline in both retail and catalog sales during the latter part of July. He says with the company's reduction in revenue forecast, she expects de-leveraging gross margin, as well as sales general & administration (SG&A) margins. He believes shares will continue to be pressured until the company is profitable.
Klinefelter says longer term, Delia's will benefit from its strong brand recognition and growth opportunities. He cut the $0.06 fiscal 2003 (Jan.) earnings per share estimate to a $0.20 loss, and cut the $0.30 fiscal 2004 earnings per share estimate to $0.20 earnings per share.