For its fiscal 2016 first quarter ended January 2, 2016, Delta Apparel net sales increased 2.5 percent over the prior year’s first quarter. Net sales were 90.2 million dollars compared to 93.4 million dollars in the prior year’s first quarter, before making the sales adjustment of The Game business.

“Over the past several quarters, we have improved our margins, reduced general and administrative expenses, and dramatically improved operating profit, net income and earnings per share. Earnings, excluding the 0.43 dollar per share gain on the sale of The Game business, for the trailing twelve-month period total 1.20 dollar per diluted share and, based on the momentum we are seeing, we expect continued growth as the fiscal year continues,” said Robert W. Humphreys, Delta Apparel’s Chairman and Chief Executive Officer.

Turns profitable against losses reported last year

Overall gross margins expanded 450 basis points and operating profit increased 5.4 million dollars, to 2.5 percent of sales, from a 3.2 million dollars loss in the comparable 2015 period. The company’s net income was 681 thousand dollars, or 0.09 dollar per diluted share, compared with a net loss in the prior year’s first quarter of 4.2 million dollars, or 0.53 dollars per diluted share.

Net sales in the basics segment grew 6.7 percent to 61.5 million dollars, with all business units continuing to exhibit solid growth and improved margins. Delta Activewear achieved 6 percent net sales growth, with sales of both catalog and private label products contributing. Catalog sales increased 7 percent due to 4 percent higher volumes coupled with a stronger mix of fashion basics carrying a higher price point.

Delta Apparel’s private label business experienced 5 percent growth, primarily driven by new customers secured during the second half of fiscal 2015. These customers include large international brands as well as trendy, fast-growth regional brands. Art Gun experienced 14 percent growth for the quarter, primarily driven by new customers brought on during the prior year. The company said that Art Gun’s historic high-growth trend was hindered during the quarter as it experienced the growing pains typical of a young, vibrant business and was challenged by the high-volume holiday demand.

Branded segment sales decline during the quarter

The company’s branded segment were 28.7 million dollars compared with 35.7 million dollars in the prior year period, which included sales in the company’s since-divested The Game business. On a comparative basis, after adjusting out the prior year’s sales in The Game business, branded segment net sales were down 1.7 million dollars, primarily due to a 2.3 million dollars decline in the Soffe business. While Soffe’s independent sporting goods channel experienced 10 percent growth, it wasn’t enough to offset losses in other areas of the business that continue to struggle in the weak retail marketplace.

Salt Life returned to its traditional, high double-digit growth, with sales improving 21 percent over the prior year’s first quarter. Salt Life’s growth was a result of strong demand for long-sleeve tees and Salt Life lifestyle designs. Junk Food’s net sales increased slightly due to double-digit growth in specialty boutiques and e-retailers, offset by a sales decline with a large retail customer. Sales on our branded ecommerce sites grew 32 percent during the December quarter, with each of our brands contributing to the growth.





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