Delta Apparel Q3 earnings increase to 0.57 dollar per share

Delta Apparel has reported earnings per diluted share of 0.57 dollars on net sales of 104.3 million dollars for its fiscal third quarter ended July 1, 2017, compared with earnings of 0.32 dollars per diluted share on net sales of 111.6 million dollars in the prior year third quarter. The company’s sales in the quarter increased 4 million dollars or around 4 percent, excluding sales in the recently-divested Junkfood Clothing Company business during the prior year quarter.

Commenting on the company’s results, Robert W. Humphreys, Delta Apparel Chairman and CEO said in a statement: “The company overall had a solid third quarter. We continue to be pleased with our ecommerce business, which achieved year-over-year sales growth of 41 percent on our consumer sites during the quarter after excluding prior year Junkfood ecommerce sales, and 15 percent on our business-to-business sites during the quarter. We believe Delta Apparel is pointed toward a good fourth quarter and will continue to position itself for future success.”

Nine-months revenues decline to 293.8 mn dollars

For the first nine months of fiscal 2017, which included two quarters of sales in the since-divested Junkfood business, net sales were 293.8 million dollars compared with 310.9 million dollars in the prior year period. The company said, excluding Junkfood sales, net sales for the first nine months would have shown a slight increase over the prior year period. Net income for the period was 8.4 million dollars or 1.07 dollars per diluted share, including the 0.11 dollar per diluted share gain on the sale of Junkfood. This compares to 6.7 million dollars or 0.84 dollar per diluted share, in the prior year period including 0.18 dollar charge to earnings related to the manufacturing realignment.

Delta Apparel said, the prior year third quarter included 11.3 million dollars of sales in the Junkfood business divested by the Company on March 31, 2017, as well as an 0.18 dollar per share expense related to the Company’s manufacturing realignment, both of which were non-recurring. Excluding the expense related to the manufacturing realignment, prior year third quarter earnings were 0.50 dollar per diluted share.

Review of the company’s business segments

The company’s basics segment’s net sales in the third quarter were 79 million dollars a 9.6 percent increase over the 72.1 million dollars reported in the prior year third quarter. Operating profit in the basics segment increased to 7.5 million dollars or 9.5 percent of sales, from 5.2 million dollars or 7.2 percent of sales, in the prior year period. Excluding the 1.8 million dollars pre-tax expense related to the manufacturing realignment, prior year operating profit was 7 million dollars or 9.7 percent of sales.

Net sales in the activewear business grew 11 percent from the prior year period, driven by single-digit sales growth in the Delta Catalog business and a 25 percent increase in the FunTees private label business. The company said, Delta Catalog sales benefited from improving conditions in the retail licensing channel coupled with continued growth in the ad-specialty and regional screenprint markets. The double-digit growth trend continued in Delta Catalog’s fashion basics, with sales up 60 percent from the prior year third quarter.

Art Gun’s net sales in the quarter declined 0.7 million dollars from the prior year due to the loss of a customer coupled with delayed new partner launches stemming from general market softness. The company expects new customers along with geographic expansion, should return Art Gun to double-digit sales growth in fiscal 2018.

Branded segment net sales for the quarter were 25.3 million dollars, compared with 39.5 million dollars in the prior year period, which included 11.3 million dollars of sales in the since-divested Junkfood business. The decline, Delta Apparel said, is due primarily to the impact of retailer bankruptcies, partially offset by sales growth at Salt Life. Operating profit for the branded segment was 2.1 million dollars compared to 2.7 million dollars in the prior year third quarter.

Soffe is growing certain sales channels and continues to perform well with e-retailers. Sales on Soffe’s consumer ecommerce site increased 15percent during the third quarter and are up 24 percent year-to-date. Soffe is further investing in its direct-to-consumer strategy with the planned opening of two new Soffe-branded retail stores. Salt Life achieved 48 percent year-over-year sales growth in its ecommerce business during the quarter but softness in the “big-box” retail sporting goods channel tempered overall growth, resulting in an aggregate sales increase of 2 percent.

Picture:Facebook/Soffe