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Delta Apparel’s Q2 net income rises to 3.6 mn dollars

By Prachi Singh

8 May 2018

Business

Delta Apparel, Inc. recorded net sales of 100 million dollars, up 1.9 million dollars or 2 percent for the second quarter. Net income for the quarter was 3.6 million dollars or 0.48 dollar per diluted share, an increase over the prior year period’s 0.47 dollar per diluted share after excluding the approximately 0.11 dollar per share gain realized in the prior year period on the sale of the Junkfood Clothing business. For the first six months, net sales increased to 190.3 million dollars or 9 percent year-over-year.

Commenting on the company’s results, Robert W. Humphreys, Delta Apparel, Inc.’s Chairman and CEO, said in a statement: “Our fiscal 2018 second quarter was both productive and profitable, with year-over-year organic sales and earnings growth in market conditions that remained challenging. The combination of our Art Gun business with the recently-acquired digital print business is a game-changer from our perspective. All things considered, we believe that Delta Apparel is well-positioned for more organic growth and a strong finish to fiscal year 2018.”

Delta Apparel reports H1 net loss of 6.3 mn dollars

A discrete provisional tax expense of 10.6 million dollars, the company said, associated with the recent United States tax reform legislation drove a net loss of 6.3 million dollars or 0.87 dollar per diluted share in the first half. Excluding the first quarter discrete impact of the tax reform legislation, first half earnings were 4.2 million dollars or 0.56 dollar per diluted share, a 12 percent increase over prior year period net income of 3.9 million dollars or 0.50 dollar per diluted share and a 36 percent increase over the prior year excluding the prior year gain on the sale of the Junkfood Clothing business.

Gross margin expansion in the branded segment and the DTG2Go business (previously Art Gun) was offset by a gross margin decline in the Activewear business attributable to higher raw material and other input costs, resulting in overall gross margins of 22.2 percent compared to 23.3 percent in the prior year period.

Financial review of Delta Apparel’s core segment results

Basics segment revenue increased by 2.9 million dollars or 4 percent to 73.7 million dollars for the second quarter. Activewear sales increased 2 percent, with 15 percent growth in catalog sales, the company added, offset by a decline in private label sales impacted by requests from customers in the December quarter to pull forward shipments to meet holiday demand. The combined DTG2Go business (previously Art Gun) achieved sales growth of nearly 60 percent over the prior year period, including approximately 20 percent organic growth.

Second quarter revenue in the branded segment was 26.3 million dollars compared to 33.3 million dollars in the prior year period, which included sales from the company’s since-divested Junkfood Clothing business. Salt Life revenue increased 7 percent for the quarter, with sales growth in most channels. Salt Life’s gross margins were consistent with the prior year period and drove profitability for the quarter. Soffe sales declined to 12.4 million dollars, but its sales for the first six months were up approximately 10 percent year-over-year. Soffe’s gross margins expanded 130 basis points year-over-year.

Picture:Facebook/Salt Life

Delta Apparel
MULTIMEDIA