Delta Apparel Q1 net sales down 5.4 percent
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Management
Delta Apparel has reported net sales of 85.3 million dollars for its fiscal 2017 first quarter ended December 31, 2016, down 4.8 million dollars or 5.4 percent. The company said, while Art Gun and ecommerce showed strong revenue growth, overall sales for the quarter were hindered by the impact of Hurricane Matthew, the closure of a large sports retailer, lower sales in Junkfood’s specialty channel due to the difficult retail environment, and inventory destocking at major retail licensing accounts in the Delta catalog business.
Commenting on the company’s first quarter trading, Robert W. Humphreys, Delta Apparel’s Chairman and Chief Executive Officer said that while sales were down year-over-year, they remain on track with expectations. “A few things that were out of our control hampered sales in our first quarter - Hurricane Matthew, atypically warm weather and The Sports Authority closure, to name a few. While we see the challenging retail environment continuing, we believe fiscal 2017 will be a year of growth and improved profitability for Delta Apparel,” he said in a press release.
Review of basics segment’s performance
Overall gross margins remained at 20.6 percent, down slightly from 20.9 percent in the prior-year first quarter. Operating income was 469 thousand dollars, compared with 2.2 million dollars for the 2016 first quarter, and the company experienced a net loss of 607 thousand dollars, or 0.08 dollar per diluted share, versus net income in the prior-year quarter of 681 thousand dollars or 0.09 dollar per diluted share.
First quarter net sales for the basics segment were 60.8 million dollars, down 1.1 percent. The company attributed this decline to a 3.1 percent drop in Delta Activewear sales driven by slower business with retail license accounts, as mass channel retailers destocked inventory during the quarter. Other Delta Activewear channels showed strong growth, with ad-specialty up 35 percent and sales into regional screen-printers up 4 percent.
Sales of higher-margin fashion basics products grew by more than 50 percent. The private label business saw solid demand during the quarter, with sales tracking those in the prior-year period. The company’s Art Gun reported net sales increase of 28 percent on 34 percent higher units.
Branded segment net sales decline
Net sales for the branded segment were 24.5 million dollars in the fiscal 2017 first quarter compared with 28.7 million dollars in the prior-year period. Soffe’s sales were down approximately 1.5 million dollars. The brand saw strong ecommerce growth, with B2C sales up 30 percent and B2B sales up 40 percent.
Junkfood, without the benefit of sales momentum generated in the prior-year first quarter from a large-scale movie release, also experienced comparatively lower sales due to declines at brick-and-mortar retailers.
Salt Life achieved first-quarter profit on 3.8 percent
quarter-over-quarter sales growth with expanded margins. The company said,
effects of Hurricane Matthew and the slow sell-through of long sleeve
products due to the unseasonably warm winter impeded Salt Life sales
growth. Salt Life’s juniors and performance products continued their growth
trend during the quarter, as did its ecommerce website, Saltlife.com
Picture:Facebook/Soffe Apparel