<PAGE>


     FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 14, 1999
------------------------------------------------------------------------------
------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-Q


[X]                             QUARTERLY REPORT

                            -------------------------

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                 FOR THE QUARTERLY PERIOD ENDED OCTOBER 30, 1999



                         Commission file number 0-21869

                                  DELIA*S INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

         DELAWARE                                         13-3914035
(STATE OR OTHER JURISDICTION OF             (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

                   435 HUDSON STREET, NEW YORK, NEW YORK 10014
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
                                   (ZIP CODE)

                                 (212) 807-9060
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES  X   NO
                                              ---      ---
 Number of shares of Common Stock outstanding as of December 1, 1999: 14,906,472

                                 ----------

------------------------------------------------------------------------------
------------------------------------------------------------------------------
<PAGE>

     STATEMENTS CONTAINED IN THIS DOCUMENT, INCLUDING, WITHOUT LIMITATION,
INFORMATION APPEARING UNDER "PART I - ITEM 2 - MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," MAY BE
FORWARD-LOOKING STATEMENTS (WITHIN THE MEANING OF SECTION 27A OF THE AMENDED
SECURITIES ACT OF 1933 AND SECTION 21E OF THE AMENDED SECURITIES EXCHANGE ACT OF
1934). WHEN USED IN THIS DOCUMENT, THE WORDS "BELIEVE," "PLAN," "INTEND,"
"EXPECT" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE
FORWARD-LOOKING STATEMENTS, WHICH APPLY ONLY AS OF THE DATE OF THIS REPORT.
THESE STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED IN THE FORWARD-LOOKING
STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO,
GENERAL ECONOMIC CONDITIONS; CHANGES IN CONSUMER SPENDING PATTERNS; INCREASES IN
THE COST OF MATERIALS, PRINTING, PAPER, POSTAGE, SHIPPING AND LABOR; TIMING OF
CATALOG MAILINGS; CUSTOMER RESPONSE RATES; OPPORTUNITIES TO EXPAND AND THE
ABILITY TO INCREASE COMPARABLE STORE SALES; LEVELS OF COMPETITION; DIFFICULTIES
IN INTEGRATING ACQUISITIONS; THE ABILITY TO LOCATE AND OBTAIN ACCEPTABLE STORE
SITES AND LEASE TERMS OR RENEW EXISTING LEASES; THE ABILITY TO OBTAIN ADDITIONAL
CAPITAL TO FUND THE BUILD-OUT OF NEW STORES; ACCEPTANCE OF NEW RETAIL CONCEPTS;
ADVERSE WEATHER CONDITIONS, CHANGES IN WEATHER PATTERNS AND OTHER FACTORS
AFFECTING RETAIL STORES; AND OTHER FACTORS OUTSIDE OUR CONTROL. THESE FACTORS,
AND OTHER FACTORS THAT APPEAR IN THIS REPORT OR IN OUR OTHER SECURITIES AND
EXCHANGE COMMISSION FILINGS, INCLUDING OUR ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED JANUARY 31, 1999, COULD AFFECT OUR ACTUAL RESULTS AND COULD CAUSE OUR
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING
STATEMENTS MADE BY US OR ON OUR BEHALF.

     ALL REFERENCES IN THIS REPORT TO A FISCAL YEAR PRIOR TO FISCAL 1999 REFER
TO THE YEAR ENDED JANUARY 31 FOLLOWING THE PARTICULAR CALENDAR YEAR (E.G.,
"FISCAL 1998" REFERS TO THE YEAR ENDING JANUARY 31, 1999). EFFECTIVE FEBRUARY 1,
1999, WE CHANGED OUR FISCAL YEAR TO END ON THE SATURDAY CLOSEST TO JANUARY 31
(E.G., "FISCAL 1999" REFERS TO THE FIFTY-TWO WEEKS ENDING JANUARY 29, 2000).


                                     PART I
                              FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                       2

<PAGE>

                          DELIA*S INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                                                                  JANUARY 31, 1999  OCTOBER 30, 1999
                                                                                  ----------------  ----------------
                                                                                         *             (UNAUDITED)
                                                     ASSETS
<S>                                                                                      <C>         <C>
CURRENT ASSETS
     Cash and cash equivalents .......................................................   $  10,981   $  22,018
     Short-term investments ..........................................................        --        48,482
     Merchandise inventories .........................................................      21,232      39,310
     Prepaid expenses and other current assets .......................................      11,352      26,195
                                                                                         ---------   ---------
         Total current assets ........................................................      43,565     136,005
PROPERTY AND EQUIPMENT, net of accumulated depreciation of
     $3,191 at January 31, 1999 and $5,219 at October 30, 1999 .......................      12,542      32,627
DEFERRED TAX ASSETS ..................................................................        --         9,682
INTANGIBLE ASSETS ....................................................................      25,308      24,516
OTHER ASSETS .........................................................................         729         241
                                                                                         ---------   ---------
TOTAL ASSETS  .......................................................................    $  82,144   $ 203,071
                                                                                         ---------   ---------
                                                                                         ---------   ---------

                                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable ................................................................   $  10,185   $  27,433
     Accrued expenses and other current liabilities ..................................       7,706       6,088
     Current portion of long-term debt and capital lease obligations .................         194       9,550
     Accrued restructuring ...........................................................        --         2,662
                                                                                         ---------   ---------

         Total current liabilities ...................................................      18,085      45,733

DEFERRED TAX LIABILITY ...............................................................        --        28,991
LONG-TERM DEBT AND OBLIGATIONS UNDER CAPITAL LEASES ..................................        --         6,970
OTHER LONG-TERM LIABILITIES ..........................................................         452         635

MINORITY INTEREST ....................................................................        --        36,932

STOCKHOLDERS' EQUITY
     Preferred stock, par value $.01 per share; Authorized - 1,000,000 shares;
         Issued and outstanding - none ...............................................        --          --
     Common stock, par value $.01 per share; Authorized - 50,000,000 shares;
         Issued and outstanding - 14,185,425 and 14,895,972 shares at
         January 31, 1999 and October 30, 1999, respectively .........................         142         149
     Additional paid-in capital ......................................................      54,133      79,292
     Retained earnings ...............................................................       9,332      22,103
     Common stock in treasury - 551,046 shares at October 30, 1999 ...................        --       (17,734)
                                                                                         ---------   ---------
         Total stockholders' equity ..................................................      63,607      83,810
                                                                                         ---------   ---------

                                       3

<PAGE>

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...........................................   $  82,144   $ 203,071
                                                                                         ---------   ---------
                                                                                         ---------   ---------

</TABLE>


* Condensed from audited financial statements


       See Notes to Unaudited Condensed Consolidated Financial Statements

                                       4

<PAGE>

                          DELIA*S INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>

                                             THREE MONTHS   THIRTEEN WEEKS
                                                ENDED           ENDED
                                           OCTOBER 31, 1998 OCTOBER 30, 1999
                                           ---------------- ----------------
                                                      (UNAUDITED)
<S>                                             <C>         <C>
NET SALES ...................................   $ 40,821    $ 48,085
COST OF SALES ...............................     19,979      25,776
                                                --------    --------
GROSS PROFIT ................................     20,842      22,309
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES      19,691      32,395
INTEREST AND OTHER INCOME, NET ..............       (126)       (703)
MINORITY INTEREST ...........................       --        (2,125)
                                                --------    --------
INCOME (LOSS) BEFORE INCOME TAXES ...........      1,277      (7,258)
PROVISION (BENEFIT) FOR INCOME TAXES ........        530      (1,257)
                                                --------    --------
NET INCOME (LOSS) ...........................   $    747    $ (6,001)
                                                --------    --------
                                                --------    --------
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE   $   0.05    $  (0.42)
                                                --------    --------
                                                --------    --------
SHARES USED IN THE CALCULATION OF BASIC
     NET INCOME (LOSS) PER SHARE ............     14,139      14,342
                                                --------    --------
                                                --------    --------
SHARES USED IN THE CALCULATION OF DILUTED
     NET INCOME (LOSS) PER SHARE ............     14,735      14,342
                                                --------    --------
                                                --------    --------

</TABLE>

<TABLE>
<CAPTION>

                                             NINE MONTHS   THIRTY-NINE WEEKS
                                                ENDED           ENDED
                                          OCTOBER 31, 1998 OCTOBER 30, 1999
                                          -----------------------------------
                                                     (UNAUDITED)

<S>                                            <C>         <C>
NET SALES ..................................   $ 98,466    $123,272
COST OF SALES ..............................     47,914      69,249
                                               --------    --------
GROSS PROFIT ...............................     50,552      54,023
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     47,282      80,053
RESTRUCTURING CHARGE (NOTE 4) ..............       --        22,907
GAIN ON SUBSIDIARY INITIAL PUBLIC OFFERING .       --       (70,091)
INTEREST AND OTHER INCOME, NET .............       (767)     (1,870)
MINORITY INTEREST ..........................       --        (2,610)
                                               --------    --------
INCOME BEFORE INCOME TAXES .................      4,037      25,634
PROVISION FOR INCOME TAXES .................      1,433      12,863
                                               --------    --------
NET INCOME .................................   $  2,604    $ 12,771
                                               --------    --------
                                               --------    --------
BASIC NET INCOME PER SHARE .................   $   0.19    $   0.89
                                               --------    --------
                                               --------    --------
DILUTED NET INCOME PER SHARE ...............   $   0.19    $   0.82
                                               --------    --------
                                               --------    --------
SHARES USED IN THE CALCULATION OF BASIC
     NET INCOME PER SHARE ..................     13,653      14,301
                                               --------    --------
                                               --------    --------


                                       5

<PAGE>

SHARES USED IN THE CALCULATION OF DILUTED
     NET INCOME PER SHARE ..................     13,990      15,494
                                               --------    --------
                                               --------    --------

</TABLE>

       See Notes to Unaudited Condensed Consolidated Financial Statements



                                       6


<PAGE>

                          DELIA*S INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                  NINE MONTHS     THIRTY-NINE WEEKS
                                                                                     ENDED              ENDED
                                                                                OCTOBER 31, 1998  OCTOBER 30, 1999
                                                                                ----------------  -----------------
                                                                                            (UNAUDITED)
<S>                                                                                  <C>          <C>
CASH FLOWS USED IN OPERATING ACTIVITIES:
     Net income ..................................................................   $   2,604    $  12,771
     Adjustments to reconcile net income to net cash used in operating activities:
       Depreciation and amortization .............................................       1,631        2,950
       Gain on subsidiary initial public offering ................................        --        (70,091)
       Restructuring charge (see Note 4) .........................................        --         23,407
       Deferred taxes ............................................................        --         19,309
       Minority interest .........................................................        --         (2,610)
       Amortization of premiums and discounts on investments, net ................         160         (318)
       Compensation expense related to issuance of restricted stock and
          stock appreciation rights ..............................................          44         --
       Changes in operating assets and liabilities:
              Merchandise inventories ............................................     (18,262)     (18,578)
              Prepaid expenses and other current assets ..........................      (6,677)     (14,954)
              Other assets .......................................................         165        1,718
              Current liabilities ................................................       2,139       15,343
              Deferred credits ...................................................        (310)         183
                                                                                     ---------    ---------
     Net cash used in operating activities .......................................     (18,506)     (30,870)
                                                                                     ---------    ---------
                                                                                     ---------    ---------
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
     Acquisition of businesses, net of cash acquired .............................     (15,187)        (444)
     Capital expenditures ........................................................      (4,180)     (24,571)
     Purchases of held-to-maturity investment securities .........................        --        (65,158)
     Proceeds from the maturity of held-to-maturity investment securities ........      30,024       16,994
     Purchases of available-for-sale investment securities .......................     (46,513)        --
     Proceeds from the sale of available-for-sale investment securities ..........      53,404         --
                                                                                     ---------    ---------
Net cash provided by (used in) investing activities ..............................      17,548      (73,179)
                                                                                     ---------    ---------
                                                                                     ---------    ---------
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
     Net proceeds from issuance of subsidiary common stock .......................        --         97,639
     Proceeds from long-term debt and capital leases .............................        --         16,585
     Exercise of 7,375 and 193,285 stock options, respectively ...................          82        1,121
     Principal payments of long-term debt and capital lease obligations ..........        (155)        (259)
                                                                                     ---------    ---------
Net cash provided by (used in) financing activities ..............................         (73)     115,086
                                                                                     ---------    ---------
                                                                                     ---------    ---------
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS ...................................      (1,031)      11,037

CASH & CASH EQUIVALENTS--BEGINNING OF PERIOD .....................................       4,485       10,981
                                                                                     ---------    ---------
CASH & CASH EQUIVALENTS--END OF PERIOD ...........................................   $   3,454    $  22,018
                                                                                     ---------    ---------
                                                                                     ---------    ---------

                                       7

</TABLE>


<PAGE>

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:

-        Issuance of 812,501 shares of common stock in connection with the July
         1998 Screeem! acquisition.

-        Cancellation in June 1999 of 33,784 shares of common stock originally
         issued in the Screeem! acquisition.

-        Issuance in September 1999 of 1,586,996 shares of iTurf common stock in
         connection with the Taponline acquisition. (Note 5)

       See Notes to Unaudited Condensed Consolidated Financial Statements

                                       8

<PAGE>

                          DELIA*S INC. AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1. BUSINESS

     dELiA*s Inc., through our catalogs, retail stores and Web sites, is a
leading marketer of casual apparel, accessories, soccer merchandise and home
furnishings to young men and young women between the ages of 10 and 24, an age
group known as "Generation Y."

     We are subject to seasonal fluctuations in our merchandise sales and
results of operations. We expect our net sales generally to be higher in the
second half of each fiscal year than in the first half of the same fiscal year.

      On April 14, 1999, we completed an initial public offering of
approximately 4.8 million shares of class A common stock of iTurf Inc., our
Internet-focused subsidiary. iTurf used $17.7 million of the total $97.4 million
in net offering proceeds to purchase 551,046 shares of our common stock from us,
which shares have been treated as treasury stock in consolidation. As a result
of the offering, we recognized a pre-tax gain of approximately $70 million. On
September 1, 1999, iTurf issued 1,586,996 new shares of its Class A common stock
in connection with its acquisition of T@ponline.com, Inc. See Note 5,
"Acquisition", for a description of the Taponline transaction. As of October 30,
1999, we owned 92% of the vote and 66% of the value of iTurf. Subsequent to the
end of the quarter, our interest in iTurf was reduced as a result of
transactions described in Note 7.

     Effective February 1, 1999, we changed our fiscal year from the year ending
January 31 to the 52 weeks ending on the Saturday closest to January 31.



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

     PRINCIPLES OF CONSOLIDATION--The condensed consolidated financial
statements include the accounts of dELiA*s Inc. and subsidiaries, all of which,
except iTurf, are wholly owned. The accounts of iTurf are included in the
consolidated financial statements while the outside ownership of iTurf is
reflected as minority interest on the balance sheet and income statement. All
significant intercompany balances and transactions have been eliminated in
consolidation.

     UNAUDITED INTERIM FINANCIAL STATEMENTS--The accompanying unaudited
condensed consolidated financial statements have been prepared in accordance
with the requirements for Form 10-Q and in accordance with generally accepted
accounting principles for interim financial reporting. In the opinion of
management, the accompanying condensed consolidated financial statements are
presented on a basis consistent with the audited consolidated financial
statements and reflect all adjustments (consisting of normal recurring items)
necessary for a fair presentation of results for the interim periods presented.
The financial statements and footnote disclosures should be read in conjunction
with our January 31, 1999 audited consolidated financial statements and the
notes thereto, which are included in our annual report on Form 10-K for the year
ended January 31, 1999, which was filed under the Securities Exchange Act of
1934. Results for the interim periods are not necessarily indicative of the
results to be expected for the year.

                                       9

<PAGE>

3. SEGMENT INFORMATION

     dELiA*s determines operating segments in accordance with Statement of
Financial Accounting Standards No. 131. Our reportable segments are generally
defined by their method of distribution; different segments may offer similar
products to similar customers, but are managed separately because of their
distribution methods. Commencing in fiscal 1999, dELiA*s has three reportable
segments: catalog, retail and iTurf. Each of these segments earns revenues
primarily from the sale of apparel, accessories and soccer equipment to
consumers. The catalog segment takes phone and mail orders from our customers
and mails merchandise directly to those customers. Our retail stores display
merchandise in mall and strip mall stores and sell directly to customers who
visit those locations. iTurf sells merchandise through our various Web sites and
also recognizes advertising, subscription and licensing revenues. Sales outside
of the United States are insignificant.

     The Company evaluates performance and allocates resources primarily based
on profit and loss after expense allocations for shared resources but before
unusual items, income taxes, interest and other income and minority interest.
There are no material differences between accounting policies used by the
reportable segments in preparation of this information and those described in
the summary of significant accounting policies in this report and in our annual
report on Form 10-K for the year ended January 31, 1999.

     In connection with the iTurf initial public offering in April 1999, dELiA*s
and iTurf entered into intercompany agreements that govern the transactions
between iTurf and the other segments. Intercompany profit or loss generated by
such agreements is eliminated in consolidation. For transactions between the
other segments, and for transactions involving iTurf prior to its initial public
offering, inter-segment product sales are recorded at cost and shared costs are
allocated on a basis believed by management to be reasonable.

     The segment disclosure for fiscal 1998 has been restated to reflect the
operating segments as defined for fiscal 1999.

<TABLE>
<CAPTION>

                                                                              (in thousands)
THREE MONTHS ENDED OCTOBER 31, 1998                            Catalog            Retail            iTurf            Total
                                                               -------            ------            -----            -----
<S>                                                           <C>              <C>                <C>             <C>
Revenues from external customers                              $  24,419        $   15,338         $   1,064       $   40,821
Operating profit (loss)                                            (179)            1,139               191            1,151

THIRTEEN WEEKS ENDED OCTOBER 30, 1999                          Catalog            Retail            iTurf            Total
                                                               -------            ------            -----            -----
Revenues from external customers                              $  25,147        $   17,637         $   5,301       $   48,085
Operating loss                                                   (1,631)           (1,136)           (7,319)         (10,086)

NINE MONTHS ENDED OCTOBER 31, 1998                             Catalog            Retail            iTurf            Total
                                                               -------            ------            -----            -----
Revenues from external customers                              $  73,388        $   23,185         $   1,893       $   98,466
Operating profit                                                  1,949             1,229                92            3,270
Property & equipment, net                                         6,701             4,090               269           11,060

THIRTY-NINE WEEKS ENDED OCTOBER 30, 1999                       Catalog            Retail            iTurf            Total
                                                               -------            ------            -----            -----
Revenues from external customers                              $  74,911        $   37,493         $  10,868       $  123,272
Operating loss                                                   (7,785)           (7,205)          (10,540)         (25,530)
Property & equipment, net                                        16,237            13,323             3,067           32,627

</TABLE>

                                       10

<PAGE>

<TABLE>
<CAPTION>

                                                         THREE MONTHS     THIRTEEN WEEKS     NINE MONTHS       THIRTY-NINE WEEKS
                                                             ENDED          ENDED              ENDED                ENDED
                                                       OCTOBER 31, 1998  OCTOBER 30, 1999  OCTOBER 31, 1998    OCTOBER 30, 1999
                                                       ----------------  ----------------  ----------------    ----------------
                                                                               (in thousands)
<S>                                                     <C>                 <C>               <C>                 <C>
Operating profit (loss) for reportable segments         $  1,151            $(10,086)         $  3,270            $(25,530)
Restructuring charges (Note 4) ................             --                  --                --               (23,407)
Gain on subsidiary initial public offering ....             --                  --                --                70,091
Interest and other income, net ................              126                 703               767               1,870
Minority interest .............................             --                 2,125              --                 2,610
                                                        --------            --------          --------            --------
Total income (loss) before taxes ..............         $  1,277            $ (7,258)         $  4,037            $ 25,634
                                                        --------            --------          --------            --------
                                                        --------            --------          --------            --------

</TABLE>

<TABLE>
<CAPTION>

                                                            OCTOBER 31, 1998  OCTOBER 30, 1999
                                                            ----------------  ----------------
                                                                    (in thousands)
<S>                                                          <C>              <C>
Property and equipment for reportable segments               $    11,060      $    32,627
Other assets                                                      73,103          170,444
                                                             -----------      -----------
Total consolidated assets                                    $    84,163      $   203,071
                                                             -----------      -----------
                                                             -----------      -----------

</TABLE>

4. RESTRUCTURING CHARGE

     During the first quarter of fiscal 1999, we recorded a charge of
approximately $23.4 million in connection with our restructuring plan to exit
our Screeem! and Jean Country retail operations. The charge is comprised of the
following:

-        $18.0 million for the write-off of the remaining unamortized balance of
         goodwill and other intangibles relating to our acquisition of the
         Screeem! and Jean Country retail operations;

-        $4.2 million for the shut-down or conversion of certain retail stores
         to the dELiA*s retail concept with the related adjustment for assets
         that will no longer be used;

-        $700,000 for the elimination of jobs at the Screeem! corporate office
         and the store locations to be closed, resulting in employee severance
         costs; and

-        $500,000 million for the liquidation of inventory carried at stores to
         be converted or closed (reflected in cost of sales).

     The total charge of $23.4 million includes $22.9 million that is included
in operating expenses as a restructuring charge and $500,000 included as cost of
sales. In addition, as part of our acquisition of the Screeem! and Jean Country
retail operations, we agreed that if the mean of the intraday high and low bid
prices for the Company's common stock for the 20 consecutive trading days
immediately preceding January 10, 2000 (the "18-Month Price") is less than
$18.00, we will issue to the sellers that number of additional shares of dELiA*s
common stock that is equal to (i) the excess of (x) the product of 174,550
shares multiplied by $18.00 over (y) the product of 174,550 shares multiplied by
the greater of the 18-Month Price or $10.00 divided by (ii) the 18-Month Price.
If we are required to issue additional shares, the value of those shares will
result in a charge to earnings in the fourth quarter of fiscal 1999.

     During the second and third quarters, we did not make any significant
changes in our estimate of the above restructuring charge, nor did we incur any
of the estimated store shut-down/ conversion or job elimination expenses. We
expect such costs to be incurred primarily in the fourth quarter of fiscal 1999
and first quarter of fiscal 2000. As our plans progress, we anticipate that we
may need to record additional losses on inventory liquidation and other
restructuring-related costs, as well as store operating losses during the
transition period.

                                       11

<PAGE>

5. ACQUISITION

     On September 1, 1999, iTurf acquired T@ponline.com, Inc. pursuant to an
Agreement and Plan of Merger dated August 10, 1999. As a result of the
transaction, Taponline became a wholly owned subsidiary of iTurf. The aggregate
consideration paid consisted of 1,586,996 newly issued shares of iTurf Class A
common stock. The transaction, which was structured as a tax-free
reorganization, was accounted for under the purchase method of accounting. On
November 17, 1999, we announced our intention to spin off our iTurf interest to
our shareholders. Accordingly, no gain was recognized in connection with
issuance of iTurf common stock for the Taponline transaction and no gain will be
recognized on the future issuance of shares of iTurf common stock by iTurf.


6. COMMITMENTS AND CONTINGENCIES

     In May 1999, iTurf entered into a strategic marketing alliance with America
Online, Inc. Over the two-year term of the agreement, iTurf has agreed to pay
America Online a total of approximately $8,100,000.

     In June 1999, two separate purported class action complaints were filed
against dELiA*s, certain of our officers and directors, and a former officer of
one of our subsidiaries, alleging violations of the federal securities laws. The
class periods run from May 21, 1998 through June 17, 1998 and January 20, 1998
through September 10, 1998, respectively. On August 3, 1999, the plaintiffs in
both suits filed a motion to consolidate the suits. We intend to vigorously
defend against the allegations. Based upon information presently known to
management, we do not believe that the ultimate resolution of these lawsuits
will have a material adverse effect on our financial condition, results of
operations or cash flows.

     In August 1999, iTurf entered into a strategic marketing alliance with
Microsoft Corporation under which we have agreed to pay Microsoft a total of at
least $4.6 million over the one-year term of the agreement.

     On August 6, 1999, we purchased for $6.2 million an approximately 415,000
square foot distribution facility in Hanover, Pennsylvania, of which we
previously leased approximately 360,000 square feet. We borrowed $5.3 million
from Allfirst Bank in the form of a mortgage loan on the property to pay for
$4.9 million of the purchase price and $400,000 of planned capital improvements.
We are subject to certain covenants under the loan agreement, including a
covenant to maintain a fixed charge coverage ratio. On August 10, 1999 we
entered into an interest-rate swap agreement with Allfirst Bank under which we
effectively converted the LIBOR-based variable interest rate mortgage to a fixed
rate loan with an interest rate of approximately 8.78%.

     In connection with the acquisition of the distribution facility, we hired
an environmental consultant to perform an assessment of the facility. As a
result of that assessment, the seller of the property performed certain soil
remediation and created a groundwater remediation plan, each relating to the
presence of underground fuel oil, waste oil and gasoline tanks located on the
property and subsequently removed by the seller. The Pennsylvania Department of
Environmental Protection has released the seller from liability with respect to
soil contamination and has approved the ground water remediation plan. The
seller has set funds aside in escrow to cover up to $250,000 in ground water
remediation costs. We do not believe that the environmental conditions at the
facility will have a material adverse effect on our consolidated financial
condition, results of operations or cash flows.

     In connection with its acquisition of T@ponline.com, Inc., iTurf agreed to
enter into a marketing alliance with MarketSource to promote iTurf's network of
sites through MarketSource's offline marketing channels. iTurf committed to
purchasing approximately $6.5 million in promotional opportunities through these
channels over the next three years.

                                       12

<PAGE>

     During the third quarter we borrowed a total of $9 million under our credit
facility with First Union National Bank. The facility consists of a revolving
line of credit permitting us to borrow up to $25 million and provides for the
issuance of documentary and standby letters of credit up to $10 million. Our
ability to continue to borrow under the credit agreement is contingent on a
number of conditions including our compliance with tangible net worth, fixed
charge coverage ratio and debt to cash flow covenants. In addition, amounts
outstanding under the facility are limited to specified percentages of the value
of our eligible inventory as determined under the credit agreement. As our
inventory levels decrease due to sales, we will be required to repay a portion
of the amounts outstanding.

7. SUBSEQUENT EVENTS

     On November 17, 1999, we converted 325,000 shares of our iTurf Inc. Class B
common stock to Class A common stock and sold such shares to Kistler Joint
Venture at a price of $11.3125 per share. On November 29, 1999 we registered
1,675,000 shares of iTurf Inc. Class A common stock, to be issued upon
conversion, for future sale. On December 6, 1999, we converted 750,000 of Class
B common stock of iTurf Inc. to Class A common stock and sold those shares to
Deutsche Bank Securities pursuant to the registration statement. The sale price
for the Deutsche Bank transaction was $13.875 per share. As a result of these
transactions, our interest in iTurf was reduced to 90% of vote and 60% of value.

                                       13

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


     THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH
OUR CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED
ELSEWHERE IN THIS REPORT. THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING
STATEMENTS THAT REFLECT DELIA*S PLANS, ESTIMATES AND BELIEFS. OUR ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT
LIMITED TO, THOSE DISCUSSED BELOW AND ELSEWHERE IN THIS REPORT AND THOSE
DISCUSSED IN OUR OTHER SECURITIES AND EXCHANGE COMMISSION FILINGS, INCLUDING OUR
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JANUARY 31, 1999.

OVERVIEW

     We are a teen-focused marketer of casual apparel, accessories, cosmetics,
home furnishings and soccer merchandise. Through the dELiA*s catalog and Web
site, which target girls and young women between the ages of 10 and 24 (an age
group known as "Generation Y"), we believe we are the leading direct marketer of
casual apparel, related accessories and cosmetics focused on Generation Y. In
February 1999, we opened our first full-priced dELiA*s store in New York. We
opened four additional dELiA*s stores during the second quarter of fiscal 1999
and six more stores during the third quarter, bringing the total number of
full-price dELiA*s brand stores in operation to eleven at October 30, 1999. We
plan to continue the expansion of this concept through new store openings and
the conversion of certain of our Screeem! and Jean Country stores. Through our
TSI Soccer catalog, retail stores and Web site, we are a leading direct marketer
and retailer of specialty soccer and other athletic merchandise to Generation Y
boys and girls. Our other catalog titles include Contents, which offers home
furnishings to Generation Y, and Droog, which offers apparel and accessories to
Generation Y boys and young men. We also target pre-teen girls with our
Storybook Heirlooms catalog.

     On April 14, 1999, we completed an initial public offering of approximately
4.8 million shares of Class A common stock of iTurf Inc., our Internet-focused
subsidiary. iTurf used $17.7 million of the total $97.4 million in net offering
proceeds to purchase 551,046 shares of dELiA*s common stock from dELiA*s, which
we have treated as treasury stock in consolidation. As a result of the offering,
we recognized a gain of approximately $70 million before taxes ($41 million
after taxes). On September 1, 1999, iTurf acquired T@ponline.com, Inc. in
exchange for 1,586,996 newly issued shares of iTurf Class A common stock. As of
October 30, 1999, we owned approximately 66% of the value and 92% of the vote of
iTurf. The outside ownership of iTurf is reflected as minority interest in the
accompanying financial statements.

     dELiA*s maintains its corporate and Internet headquarters and a
telemarketing and customer service group in New York, New York, additional
telemarketing and corporate facilities in Durham, North Carolina and a
fulfillment facility for processing merchandise in Hanover, Pennsylvania. The
Storybook Heirlooms business is based in the San Francisco, California area.

     RISKS. Growth in our revenue base and further penetration of our target
market may negatively affect our levels of percentage annual growth in net sales
and operating income. In addition, when we increase the number of catalogs we
mail, we observe that new customers respond at lower rates than our existing
customers have historically responded. We have also observed that when customers
receive multiple editions of catalogs within the same fiscal quarter, aggregate
response rates decline. Increases in the cost of materials, printing, paper,
postage, shipping and labor also adversely affect the profitability of our
catalog business.

     A variety of factors affects our comparable store sales, including, among
others, fashion trends, the general retail sales environment, our ability to
efficiently source and distribute products, changes in our merchandise mix and
our ability to execute our business strategy efficiently. Comparable store sales
may fluctuate significantly as we roll out new retail concepts and enter new
markets. In addition, our ability to

                                       14

<PAGE>

expand our retail business may be limited by our ability to locate and obtain
acceptable store sites and lease terms or renew existing leases.

     Our plans to expand both retail and catalog operations depend on obtaining
additional capital and recruiting experienced managers. There can be no
assurance that the company will be able to raise capital or recruit managers as
it grows.

     Our business generally depends on our ability to anticipate the frequently
changing fashion tastes of our customers and to offer merchandise that appeals
to their preferences on a timely and affordable basis. If we misjudge our
merchandise selection, our image with our customers could be materially
adversely affected.

     We believe that the continued growth of our Internet segment will depend in
large part on our ability to increase awareness of our brand names, to provide
our customers with superior Internet community and e-commerce experiences and to
continue to enhance our systems and technology to support increased traffic to
our Web sites. Accordingly, we intend to maintain a high level of marketing and
promotional expenditures and to invest heavily to develop our Web sites,
technology and operating infrastructure. Slower revenue growth than we
anticipate or operating expenses that exceed our expectations could have a
material adverse effect on our business.



RESTRUCTURING CHARGE

     During the first quarter of fiscal 1999, we recorded a charge of
approximately $23.4 million in connection with our restructuring plan to exit
our Screeem! and Jean Country retail operations. The charge is comprised of the
following:

-        $18.0 million for the write-off of the remaining unamortized balance of
         goodwill and other intangibles relating to our acquisition of the
         Screeem! and Jean Country retail operations;

-        $4.2 million for the shut-down or conversion of certain retail stores
         to the dELiA*s retail concept with the related adjustment for assets
         that will no longer be used;

-        $700,000 for the elimination of jobs at the Screeem! corporate office
         and the store locations to be closed, resulting in employee severance
         costs; and

-        $500,000 for the liquidation of inventory carried at stores to be
         converted or closed (reflected in cost of sales).

     The total charge of $23.4 million includes $22.9 million that is included
in operating expenses as a restructuring charge and $500,000 included as cost of
sales. In addition, as part of our acquisition of the Screeem! and Jean Country
retail operations, we agreed that if the mean of the intra-day high and low bid
prices for the Company's common stock for the 20 consecutive trading days
immediately preceding January 10, 2000 (the "18-Month Price") is less than
$18.00, we will issue to the sellers that number of additional shares of dELiA*s
common stock that is equal to (i) the excess of (x) the product of 174,550
shares multiplied by $18.00 over (y) the product of 174,550 shares multiplied by
the greater of the 18-Month Price or $10.00 divided by (ii) the 18-Month Price.
If we are required to issue additional shares, the value of those shares will
result in a charge to earnings in the fourth quarter of fiscal 1999.

     During the second and third quarters, we have not made any significant
changes in our estimate of the above restructuring charge, nor have we yet
incurred any of the estimated store shut-down/ conversion or job elimination
expenses. We expect such costs to be incurred primarily in the fourth quarter of
fiscal 1999 and first quarter of fiscal 2000. As our plans progress, we
anticipate that we may need to record higher than anticipated losses on
inventory liquidation and other restructuring-related costs, as well as
additional store operating losses during the transition period.

                                       15

<PAGE>

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, the percentage
relationship of certain items from our statement of operations to net sales. Any
trends reflected by the following table may not be indicative of future results.

<TABLE>
<CAPTION>

                                                 THREE MONTHS    THIRTEEN WEEKS     NINE MONTHS    THIRTY-NINE WEEKS
                                                     ENDED            ENDED            ENDED           ENDED
                                               OCTOBER 31, 1998 OCTOBER 30, 1999 OCTOBER 31, 1998  OCTOBER 30, 1999
                                               ---------------- ---------------- ----------------  ----------------
<S>                                                 <C>              <C>              <C>               <C>
Net sales                                           100.0%           100.0%           100.0%            100.0%
Cost of sales                                        49.0             53.6             48.7              56.2
                                                    -----            -----            -----             -----
Gross profit                                         51.0             46.4             51.3              43.8
Selling, general and administrative expenses         48.2             67.4             48.0              64.9
Restructuring charge                                  --               --               --               18.6
Gain on subsidiary initial public offering            --               --               --              (56.9)
Interest and other income, net                       (0.3)            (1.5)            (0.8)             (1.5)
Minority interest                                     --              (4.4)             --               (2.1)
                                                    ------           ------           ------            ------
Income (loss) before income taxes                     3.1            (15.1)             4.1              20.8
Provision (benefit) for income taxes                  1.3             (2.6)             1.5              10.4
                                                    -----            -----            -----             -----
Net income (loss)                                     1.8%           (12.5)%            2.6%             10.4%
                                                    -----            -----            -----             -----
                                                    -----            -----            -----             -----

</TABLE>

COMPARISON OF THIRTEEN WEEKS ENDED OCTOBER 30, 1999 AND THREE MONTHS ENDED
OCTOBER 31, 1998

     NET SALES. Net sales increased approximately $7.3 million, or 18%, to $48.1
million in the third quarter of fiscal 1999 from $40.8 million in the third
quarter of fiscal 1998. Revenues were up in our retail segment as a result of
the introduction of dELiA*s brand full-price stores and addition of TSI
Soccer stores, offset to some degree by the closure of several Screeem & Jean
Country Stores. The increase is also partially due to increased Internet
revenues, which include sales that have shifted from our catalogs. An increase
in catalog revenues reflects sales from our Storybook Heirlooms catalog, which
was launched in January 1999, offset by a decline in sales from other catalog
titles primarily as a result of lower circulation and the migration of sales to
our Internet sites.

     GROSS MARGIN. Gross margin decreased to 46.4% of net sales in the third
quarter of fiscal 1999 from 51.0% in the third quarter of fiscal 1998. The
decrease is primarily due to significant markdowns on merchandise sold through
our Screeem! stores, a higher proportion of discounted internet and catalog
sales, a lower-margin mix of TSI Soccer merchandise sales and lower pricing on
selected catalog merchandise. We expect gross margins to continue to be affected
by discounted Screeem! sales through the remainder of fiscal 1999.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased approximately $12.7 million to $32.4 million
(or 67.4% of net sales) in the third quarter of fiscal 1999 from $19.7 million
(or 48.2% of net sales) in the third quarter of fiscal 1998. Selling, general
and administrative expenses increased primarily as a result of spending on
Internet, retail and corporate infrastructure, marketing to support retail and
Internet growth and additional expenses related to new catalog titles and the
operation of more retail stores. We expect such expenditures to continue and
selling, general and administrative expenses to remain high through the last
fiscal quarter of 1999.



COMPARISON OF THIRTY-NINE WEEKS ENDED OCTOBER 30, 1999 AND NINE MONTHS ENDED
OCTOBER 31, 1998

     NET SALES. Net sales increased approximately $24.8 million, or 25%, to
$123.3 million in the first three quarters of fiscal 1999 from $98.5 million in
the first three quarters of fiscal 1998. The increase in

                                       16

<PAGE>

sales is primarily due to increased revenues from our retail segment as a result
of our acquisition of the Screeem! and Jean Country business in July 1998, the
introduction of dELiA*s brand full-price stores beginning in February 1999 and
the opening of additional TSI Soccer stores, as well as from the growth of our
Internet segment which includes sales that have shifted from our catalogs. Sales
from our catalog segment increased only slightly as increases relating to our
new Storybook Heirlooms catalog were offset by lower sales from our core catalog
as a result of lower circulation, reduced response rates, lower fill rates and
the migration of sales to our Internet sites.

     GROSS MARGIN. Gross margin excluding a $500,000 charge related to the first
quarter 1999 Screeem! restructuring decreased to 44.2% of net sales in the first
three quarters of fiscal 1999 from 51.3% in the first three quarters of fiscal
1998. The decrease is primarily due to significant markdowns on merchandise sold
through our Screeem! stores, a higher proportion of discounted catalog sales,
lower catalog pricing, and, in the first quarter of fiscal 1999, higher freight
costs resulting from lean inventory levels. We expect gross margins to continue
to be affected by discounted Screeem! sales through the remainder of fiscal
1999.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased approximately $32.8 million to $80.1 million
(or 64.9% of net sales) in the first three quarters of fiscal 1999 from $47.3
million (or 48.0% of net sales) in the first three quarters of fiscal 1998.
Selling, general and administrative expenses increased primarily as a result of
spending on Internet, retail and corporate infrastructure, marketing to support
retail and Internet growth and to improve the efficiency of our distribution
processes, as well as additional catalog expenses related to the introduction of
new catalogs and the operation of more retail stores. We expect such
expenditures to continue and selling, general and administrative expenses to
remain high throughout fiscal 1999.

     RESTRUCTURING CHARGE. During the first quarter of fiscal 1999, we recorded
a charge of approximately $23.4 million in connection with our restructuring
plan to close our Screeem! and Jean Country retail operations. This charge
includes approximately $500,000 related to inventory and recorded as cost of
sales. As our plans progress, we anticipate that we may need to record
additional losses on inventory liquidation and other restructuring-related costs
as well as additional store operating losses during the transition period.

     GAIN ON SUBSIDIARY INITIAL PUBLIC OFFERING. On April 14, 1999, we completed
an initial public offering of approximately 4.8 million shares of class A common
stock of iTurf Inc., our publicly-traded Internet-focused subsidiary. As a
result of the transaction, we recognized a one-time gain of approximately $70.1
million before taxes.

                                       17

<PAGE>

SELECTED QUARTERLY RESULTS OF OPERATIONS

     The following table sets forth certain unaudited statement of operations
data for the seven fiscal quarters ended October 30, 1999, as well as such data
expressed as a percentage of total net sales for the periods indicated. This
data has been derived from our unaudited financial statements that, in the
opinion of management, include all adjustments (consisting only of normal
recurring adjustments) necessary for fair presentation of such information when
read in conjunction with our annual audited financial statements and notes
thereto.

<TABLE>
<CAPTION>

                                                  FISCAL 1998                               FISCAL 1999
                                                                FISCAL QUARTER ENDED
                                   APR. 30,   JULY 31,    OCT. 31,    JAN. 31,     MAY 1,      JULY 31,  OCTOBER 30,
                                     1998      1998        1998        1999        1999         1999       1999
                                 --------    --------    --------    --------    --------    --------    --------
                                                                      (IN THOUSANDS)

<S>                              <C>         <C>         <C>         <C>         <C>         <C>         <C>
Net sales ....................   $ 31,194    $ 26,451    $ 40,821    $ 59,898    $ 41,812    $ 33,375    $ 48,085
Cost of sales ................     14,223      13,712      19,979      30,454      23,023      20,450      25,776
                                 --------    --------    --------    --------    --------    --------    --------
Gross profit .................     16,971      12,739      20,842      29,444      18,789      12,925      22,309
Selling, general and
  administrative expenses ....     14,092      13,499      19,691      24,429      23,750      23,908      32,395
Restructuring charge .........       --          --          --          --        22,907        --          --
Gain on subsidiary initial
  public offering ............       --          --          --          --       (70,091)       --          --
Interest and other income, net       (341)       (300)       (126)       (195)       (140)     (1,027)       (703)
Minority interest ............       --          --          --          --             8        (493)     (2,125)
                                 --------    --------    --------    --------    --------    --------    --------
Income (loss) before income
  taxes ......................      3,220        (460)      1,277       5,210      42,355      (9,463)     (7,258)
Provision (benefit) for income
  taxes ......................      1,220        (317)        530       1,972      17,519      (3,399)     (1,257)
                                 --------    --------    --------    --------    --------    --------    --------
Net income (loss) ............   $  2,000    $   (143)   $    747    $  3,238    $ 24,836    $ (6,064)   $ (6,001)
                                 --------    --------    --------    --------    --------    --------    --------
                                 --------    --------    --------    --------    --------    --------    --------
Per share data:
Basic net income (loss) per
  share ......................   $   0.15    $  (0.01)   $   0.05    $   0.23    $   1.75    $  (0.42)   $  (0.42)
                                 --------    --------    --------    --------    --------    --------    --------
                                 --------    --------    --------    --------    --------    --------    --------
Shares used in the calculation
  of basic net income (loss)
  per share ..................     13,321      13,498      14,139      14,159      14,231      14,330      14,342
                                 --------    --------    --------    --------    --------    --------    --------
                                 --------    --------    --------    --------    --------    --------    --------
Diluted net income (loss) per
  share ......................   $   0.15    $  (0.01)   $   0.05    $   0.21    $   1.56    $  (0.42)   $  (0.42)
                                 --------    --------    --------    --------    --------    --------    --------
                                 --------    --------    --------    --------    --------    --------    --------
Shares used in calculation of
  diluted net income (loss)
  per share ..................     13,569      13,498      14,735      15,300      15,966      14,330      14,342
                                 --------    --------    --------    --------    --------    --------    --------
                                 --------    --------    --------    --------    --------    --------    --------

                                                                  PERCENTAGE OF TOTAL NET SALES

Net sales.....................      100.0%      100.0%    100.0%       100.0%       100.0%      100.0%      100.0%
Cost of sales.................       45.6        51.8      49.0         50.8         55.0        61.3        53.6
                                 --------    --------    --------    --------    --------    --------    --------
Gross profit..................       54.4        48.2      51.0         49.2         45.0        38.7        46.4
Selling, general, and
  administrative expenses.....       45.2        51.0      48.2         40.8         56.8        71.6        67.4
Restructuring charge..........        --          --        --           --          54.8         --          --
Gain on subsidiary initial
  public offering.............        --          --        --           --        (167.6)        --          --
Interest and other income, net       (1.1)       (1.1)     (0.3)        (0.3)        (0.3)       (3.1)       (1.5)
Minority interest.............        --          --        --           --           0.0        (1.5)       (4.4)
                                 --------    --------    --------    --------    --------    --------    --------
Income (loss) before income
  taxes.......................       10.3        (1.7)      3.1          8.7        101.3       (28.3)      (15.1)
Provision (benefit) for income
  taxes.......................        3.9        (1.2)      1.3          3.3         41.9       (10.2)       (2.6)

Net income (loss).............        6.4%       (0.5)%     1.8%         5.4%        59.4%      (18.1)%     (12.5)%
                                 --------    --------    --------    --------    --------    --------    --------
                                 --------    --------    --------    --------    --------    --------    --------

</TABLE>


         dELiA*s is subject to seasonal fluctuations in our merchandise sales
and results of operations. We expect our net sales generally to higher in the
second half of each year than in the first half of the same fiscal

                                       18

<PAGE>

year. In addition, our quarterly results may fluctuate as a result of numerous
factors, including the timing, quantity and cost of catalog mailings, responses
to those mailings, the timing of sale circulars and liquidations, sales
performance in comparable stores year-over-year, our ability to open new stores,
the timing of merchandise deliveries, market acceptance of merchandise
(including new merchandise categories and products introduced), the mix of
products sold, the hiring and training of additional personnel, the timing of
inventory write downs, the integration of acquisitions, and other operating
costs and factors beyond our control, such as general economic conditions and
actions of competitors. Accordingly, the results of operations in any quarter
will not necessarily be indicative of the results that may be achieved for a
full fiscal year or any future quarter.



LIQUIDITY AND CAPITAL RESOURCES

     Cash used in operations in the first three quarters of fiscal 1999 and 1998
was $30.9 million and $18.5 million, respectively. The increase in cash used in
operations primarily relates to operating losses and an increase in inventory
levels in an effort to improve catalog fill rates and in anticipation of greater
sales due to the growth of our retail segment.

     Investing activities used $73.2 million for the purchase of short-term
investments and capital expenditures in the first three quarters of fiscal 1999.
For the first three quarters of fiscal 1998, investing activities provided $17.5
million, which reflects proceeds from the maturity and sale of short-term
investments in fiscal 1998. During the fourth quarter of fiscal 1999, we expect
to make additional capital expenditures of approximately $2.0 million for
expansion of our retail concepts and conversion of stores between our retail
concepts as well as for investment in the infrastructure of iTurf and other
information system projects. We expect to fund these capital expenditures
through equipment leases, a mortgage loan secured by our distribution facility,
our credit facility and cash from operations.

     In addition to capital expenditures, iTurf expects to spend significant
amounts for marketing and other alliances. In May 1999, iTurf entered into a
strategic alliance agreement with America Online, Inc. under which we are
committed to cash payments of approximately $4.0 million in fiscal 1999 and $4.1
million in fiscal 2000. In August 1999, iTurf entered into a strategic marketing
alliance with Microsoft Corporation under which we have agreed to pay Microsoft
a total of at least $4.6 million over the one-year term of the agreement. In
connection with the September 1999 Taponline transaction, iTurf has agreed to
pay MarketSource $6.5 million over three years to promote our network of sites
through MarketSource's offline marketing channels.

     Cash flows from financing activities in the first three quarters of fiscal
1999 were $115.1 million, primarily as a result of the initial public offering
of iTurf common stock. In addition, during the third quarter we borrowed a total
of $9 million under our credit facility with First Union National Bank. We did
not engage in significant financing activities in the first three quarters of
fiscal 1998.

     Our credit facility with First Union National Bank, which terminates on
December 7, 2001, consists of a revolving line of credit permitting us to borrow
up to $25 million and provides for the issuance of documentary and standby
letters of credit up to $10 million. At our option, borrowings under this
facility bear interest at First Union National Bank's prime rate or at LIBOR
plus 200 basis points. Our ability to continue to borrow under the credit
agreement is contingent on a number of conditions including our compliance with
tangible net worth, fixed charge coverage ratio and debt to cash flow covenants.
In addition, borrowings are limited to specified percentages of the value of our
eligible inventory as determined under the credit agreement. As our inventory
levels decrease due to sales, we will be required to repay a portion of the
amount outstanding.

     In April 1999, we amended our credit agreement with First Union National
Bank in connection with the iTurf initial public offering such that iTurf is no
longer considered a borrower under such agreement.

                                       19

<PAGE>

Accordingly, First Union National Bank released its security interest in the
assets of iTurf as well as its pledge, assignment and security interest in the
shares of common stock of iTurf that we hold.

     On August 6, 1999, we purchased for $6.2 million an approximately 415,000
square foot distribution facility in Hanover, Pennsylvania, of which we were
previously leasing approximately 360,000 square feet. We borrowed $5.3 million
from Allfirst Bank in the form of a mortgage loan on the property to pay for
$4.9 million of the purchase price and $400,000 of planned capital improvements.
We are subject to certain covenants under the loan agreement, including a
covenant to maintain a fixed charge coverage ratio. Interest on the loan is
calculated using a variable LIBOR-based interest rate. On August 10, 1999 we
entered into an interest-rate swap agreement with Allfirst Bank under which we
effectively converted the mortgage to a fixed-rate loan with an interest rate of
approximately 8.78%.



YEAR 2000

     We are heavily dependent upon complex computer software and systems for our
operations. Many existing computer programs and systems use only two digits to
identify a year in the date field. These programs and systems were designed and
developed without considering the impact of the upcoming change in the century.
If not corrected, many computer applications could fail or create erroneous
results by or at the Year 2000.

     STATE OF READINESS. All of our material operating software and our
information technology and other systems, including telecommunications and
warehouse systems, were developed by and are supported by third party vendors.
Each of the third party vendors of our mission-critical operating software has
provided a written warranty or assurance that such software will not be affected
by the change in the century. We have modified certain of our mission-critical
software provided by third party vendors, but we believe that such modifications
will not affect the ability of such software to account for the change in the
century. The majority of the third party vendors of our other material operating
software and systems have also provided warranties or assurances that such
software and systems are able to account for the change in the century.

     We have prepared a Year 2000 compliance program, which involves:

-        identifying the material operating software and systems on which we
         depend, whether used by us or by our service providers;

-        obtaining written warranties or assurances from third party software
         and system vendors and service providers;

-        monitoring the compliance efforts of those vendors and service
         providers; and

-        testing our material operating software and systems.

     We began performing tests in the third quarter of fiscal 1999 of our
material operating software and systems to verify the assurances given by third
party vendors and ensure Year 2000 compliance. We have not yet begun to perform
these tests on certain of our software and systems and we may not be able to
test all of our material operating systems. Although we have not identified any
material software or systems as requiring remediation or replacement, we cannot
assure you that all of our material operating software and systems will be Year
2000 compliant.

     In addition to the operating systems and software we use directly, our
operations are also dependent upon the performance of operating software and
systems used by our significant service providers, including providers of
financial, telecommunications and parcel delivery services. We have contacted
each of our significant service providers and have obtained written assurances
from the majority of such providers that their relevant operating software and
systems are or would be Year 2000 compliant. We

                                       20

<PAGE>

are monitoring the status of all our significant service providers' Year 2000
compliance efforts to minimize the risk of any material adverse effect on our
operations resulting from compliance failures. However, there can be no
assurance that our service providers have, or will have, operating software and
systems that are Year 2000 compliant.

     RISKS. The failure of our software or systems to be Year 2000 compliant
could prevent us from being able to process or fulfill orders from our customers
or being able to distribute merchandise to stores in a timely manner and could
disrupt our financial and management controls and reporting systems. Any such
worst-case scenario, if not quickly remedied, would have a material adverse
effect on our business. Therefore, we are developing contingency plans with
respect to our systems and software.

     In addition, a significant portion of our merchandise sales are made with
credit cards, and our operations may be materially adversely affected to the
extent our customers are unable to use their credit cards due to Year 2000
issues that are not rectified by the customers' credit card vendors.

     We have not identified significant exposure to Year 2000 problems outside
of the information technology issues identified above.

     COSTS. To date, we have spent approximately $175,000 on Year 2000
compliance. We do not expect our total costs of addressing Year 2000 to exceed
$200,000. We believe that we have sufficiently budgeted for technology
investments, including Year 2000 compliance, and that our cash from operations,
our equipment lease arrangements, the proceeds of the iTurf initial public
offering and our credit facility, as necessary, will fund such investments.
However, given our dependence on third-party software and system vendors and
service providers, including our customers' vendors, there can be no assurance
to that effect.

                                       21

<PAGE>

                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
     In June 1999, two separate purported securities class action lawsuits were
filed against us and certain of our officers and directors and one former
officer of a subsidiary. The complaints in these lawsuits purport to be class
actions on behalf of the purchasers of our securities during the periods May 21,
1998 through June 17, 1998 and January 20, 1998 through September 10, 1998. The
complaints generally allege that the defendants violated Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder by making material
misstatements and by failing to disclose certain allegedly material information
regarding trends in our business. The complaints also allege that the individual
defendants are liable for those violations under Section 20(a) of the Securities
Exchange Act. The complaints seek unspecified damages, attorneys' and experts'
fees and costs, and such other relief as the court deems proper. The complaints
were filed in Federal District Court for the Southern District of New York by
Allain Roy on June 1, 1999 and by Lorraine Padgett on June 3, 1999. On August 3,
1999, the plaintiffs in both suits filed a motion to consolidate the suits. No
decision has been rendered on this motion.

     We intend to vigorously defend against these actions. Based upon
information presently known to management, we do not believe that the ultimate
resolution of these lawsuits will have a material adverse effect on our
financial condition, results of operations or cash flow.

ITEM 2. CHANGES IN SECURITIES
     None.

ITEM 3. DEFAULT UPON SENIOR SECURITIES
     None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     None.

ITEM 5. OTHER INFORMATION
     None.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a)      Exhibits

         See "Exhibit Index" following the signature page.


(b)      We filed the following reports on Form 8-K during the fiscal quarter:

                      (i)  current report on Form 8-K, dated August 12, 1999,
                           reporting Item 5. This report contained information
                           iTurf's agreement to acquire T@ponline.com, Inc.

                      (ii) current report on Form 8-K, dated September 7, 1998,
                           reporting Item 5 and Item 7 Exhibits. This report
                           contained information about iTurf's acquisition
                           T@ponline.com, Inc.

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<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         dELiA*s Inc.
                                         (Registrant)
Date: December 14, 1999

                                         By: /s/  Stephen I. Kahn
                                            -----------------------------------
                                                  Stephen I. Kahn
                                                  Chairman of the Board and
                                                  Chief Executive Officer


                                         By: /s/  Evan Guillemin
                                            -----------------------------------
                                                  Evan Guillemin
                                                  President, Chief Financial
                                                  Officer and Treasurer
                                                  (principal financial and
                                                  accounting officer)

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<PAGE>

                                  EXHIBIT INDEX

 2.1     Bill of Sale and Contribution and Assumption Agreement between dELiA*s
         LLC and dELiA*s Inc. (incorporated by reference to Exhibit 2.1 to the
         dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
         333-15153))

 3.1     Certificate of incorporation of dELiA*s Inc. (incorporated by reference
         to Exhibit 3.1 to the dELiA*s Inc. Registration Statement on Form S-1
         (Registration No. 333-15153))

 3.2     Bylaws of dELiA*s Inc. (incorporated by reference to Exhibit 3.2 to the
         dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
         333-15153))

10.1     Form of Employment Agreement between dELiA*s Inc. and Stephen I. Kahn
         (incorporated by reference to Exhibit 10.1 to the dELiA*s Inc.
         Registration Statement on Form S-1 (Registration No. 333-15153))

10.2     Employment Agreement between dELiA*s Inc. and Christopher C. Edgar
         (incorporated by reference to Exhibit 10.2 to the dELiA*s Inc.
         Registration Statement on Form S-1 (Registration No. 333-15153))

10.3     Employment Agreement between dELiA*s Inc. and Evan Guillemin
         (incorporated by reference to Exhibit 10.3 to the dELiA*s Inc.
         Registration Statement on Form S-1 (Registration No. 333-15153))

10.4     Form of Family Stockholders Agreement among dELiA*s Inc., Stephen I.
         Kahn and the persons listed on Exhibit A thereto (incorporated by
         reference to Exhibit 10.4 to the dELiA*s Inc. Registration Statement on
         Form S-1 (Registration No. 333-15153))

10.5     Amended and Restated 1996 Stock Incentive Plan (incorporated by
         reference to the dELiA*s Inc. Schedule 14A filed on June 12, 1998)

10.6     Restricted Stock Plan (incorporated by reference to Exhibit 10.6 to the
         dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
         333-15153))

10.7     Stock Option Agreement between dELiA*s Inc. and Evan Guillemin
         (incorporated by reference to Exhibit 10.7 to the dELiA*s Inc.
         Registration Statement on Form S-1 (Registration No. 333-15153))

10.8     Transitional Services Agreement, dated as of July 10, 1998, among
         American Retail Enterprises, L.P., Screeem Inc., and dELiA*s Inc.
         (incorporated by reference to Exhibit 10.8 to the dELiA*s Inc.
         Quarterly Report on Form 10-Q for the fiscal quarter ended October 31,
         1998)

10.9     Lease Agreement dated May 3, 1995 between dELiA*s Inc. and The Rector,
         Church Wardens and Vestrymen of Trinity Church in the City of New York
         (the "Lease Agreement"); Modification and Extension of Lease Agreement
         dated September 26, 1996 (incorporated by reference to Exhibit 10.9 to
         the dELiA*s Inc. Registration Statement on Form S-1 (Registration No.
         333-15153))

10.10    Form of Restricted Stock Agreements between dELiA*s Inc. and holders of
         Common Stock subject to the Restricted Stock Plan (incorporated by
         reference to Exhibit 10.10 to the dELiA*s Inc. Registration Statement
         on Form S-1 (Registration No. 333-15153))

10.11    Employment Agreement dated April 5, 1999 between iTurf Inc. and Stephen
         I. Kahn (incorporated by reference to Exhibit 10.10 to the iTurf Inc.
         registration statement on Form S-1 (Registration No. 333-71123))

10.12    Lease Agreement dated April 25, 1997 between dELiA*s Inc. and Keystone
         Distribution Center, Inc. (incorporated by reference to Exhibit 10.12
         to the dELiA*s Inc. Annual Report on Form 10-K for the fiscal year
         ended January 31, 1997)

                                       24

<PAGE>

10.13    Agreement dated April 4, 1997 between dELiA*s Inc. and The Rector,
         Church Wardens and Vestrymen of Trinity Church in the City of New York
         amending the Lease Agreement (incorporated by reference to Exhibit
         10.13 to the dELiA*s Inc. Annual Report on Form 10-K for the fiscal
         year ended January 31, 1997)

10.14    Agreement dated October 7, 1997 between dELiA*s Inc. and The Rector,
         Church Wardens and Vestrymen of Trinity Church in the City of New York
         amending the Lease Agreement (incorporated by reference to Exhibit
         10.14 to the dELiA*s Inc. Quarterly Report on Form 10-Q for the fiscal
         quarter ended October 31, 1997)

10.15    Amendment No. 1 to Employment Agreement between dELiA*s Inc. and
         Christopher C. Edgar, dated September 15, 1998 (incorporated by
         reference to Exhibit 10.15 to the dELiA*s Inc. Quarterly Report on Form
         10-Q for the fiscal quarter ended October 31, 1998)

10.16    Amendment No. 1 to Employment Agreement between dELiA*s Inc. and Evan
         Guillemin, dated September 15, 1998 (incorporated by reference to
         Exhibit 10.16 to the dELiA*s Inc. Quarterly Report on Form 10-Q for the
         fiscal quarter ended October 31, 1998)

10.17    Credit Agreement dated December 7, 1998 between First Union National
         Bank, dELiA*s Inc. and the subsidiaries listed on Schedule 1 thereto
         (incorporated by reference to Exhibit 10.17 to the dELiA*s Inc.
         Quarterly Report on Form 10-Q for the fiscal quarter ended October 31,
         1998)

10.18    1998 Stock Incentive Plan (incorporated by reference to Exhibit 10.17
         to the dELiA*s Inc. Quarterly Report on Form 10-Q for the fiscal
         quarter ended October 31, 1998)

10.19    Intercompany Services Agreement between dELiA*s Inc. and iTurf Inc.,
         dated April 8, 1999 (incorporated by reference to Exhibit 10.1 to the
         iTurf Inc. registration statement on Form S-1 (Registration No.
         333-71123))

10.20    Trademark License Agreement between dELiA*s Inc. and iTurf Inc., dated
         April 8, 1999 (incorporated by reference to Exhibit 10.2 to the iTurf
         Inc. registration statement on Form S-1 (Registration No. 333-71123))

10.21    Amendment No. 1, dated April 8, 1999, to Credit Agreement between First
         Union National Bank, dELiA*s Inc. and our subsidiaries listed on the
         signature page thereto (incorporated by reference to Exhibit 10.21 to
         the dELiA*s Inc. annual report on Form 10-K for the fiscal year ended
         January 31, 1999)

10.22    Advertising Agreement between iTurf and America Online, Inc., dated May
         4, 1999 (incorporated by reference to Exhibit 10.16 to the iTurf Inc.
         Quarterly Report on Form 10-Q for the fiscal quarter ended May 1,
         1999)**

10.23    Construction Loan Agreement dated August 6, 1999, among dELiA*s
         Distribution Company, dELiA*s Inc. and Allfirst Bank (incorporated by
         reference to Exhibit 10.23 to the dELiA*s Inc. Quarterly Report on Form
         10-Q for the fiscal quarter ended July 31, 1999)

10.24    Mortgage Note dated August 6, 1999 made by dELiA*s Distribution Company
         in favor of Allfirst Bank (incorporated by reference to Exhibit 10.24
         to the dELiA*s Inc. Quarterly Report on Form 10-Q for the fiscal
         quarter ended July 31, 1999)

10.25    Online Advertising Authorized Reseller Agreement between iTurf,
         Taponline and MarketSource Corporation, dated September 1, 1999
         (incorporated by reference to Exhibit 99.1 of iTurf's Current Report on
         Form 8-K dated September 7, 1999)

10.26    Offline Advertising Purchase Agreement between iTurf and MarketSource
         Corporation, dated September 1, 1999 (incorporated by reference to
         Exhibit 99.2 of iTurf's Current Report on Form 8-K dated September 7,
         1999)

                                       25

<PAGE>

10.27    Registration Rights Agreement between iTurf and Marketsource
         Corporation (incorporated by reference to Exhibit 10.19 to the iTurf
         Inc. Registration Statement on Form S-1 (Registration No. 333-90435)

10.28*   Amendment No. 2 to Employment Agreement between dELiA*s Inc. and
         Christopher C. Edgar, dated October 18, 1998

10.29*   Amendment No. 2 to Employment Agreement between dELiA*s Inc. and Evan
         Guillemin, dated October 18, 1998

10.30*   Employment Agreement dated August 1998 between Storybook Inc. (a
         wholly-owned subsidiary of dELiA*s Inc.) and Estelle DeMuesy

27.1*    Financial Data Schedule

---------------------------
*   Filed herewith
**  Confidential treatment requested as to certain portions, which portions have
    been omitted and filed separately with the SEC.

                                       26