Delta Apparel Reports Fiscal 2013 Second Quarter and Six Months Results
Branded Segment Review
Branded segment sales for the second quarter were $47.9 million, up slightly from the prior year second quarter. Junkfood, The Game and Art Gun each experienced double-digit net sales growth, which was offset by continued weakness in the Soffe business. While Soffe's strategic sporting goods channel gained new distribution and better product placement, its independent sporting goods business remained slow. Soffe's juniors business with mid-tier department stores also remained slow but various girls and "missy" college programs performed well in that channel. Junkfood continued to add specialty retail customers and new design-for-fee business, and its professional sports license business continues to grow, largely through e-commerce channels. The Game continues to show good growth, led by Salt Life, which is experiencing strong buy-in from customers. Salt Life will start shipping its new footwear line in the March quarter. Art Gun grew net sales 83 percent in the second quarter and has been profitable throughout the first half. Driving its growth were several new e-commerce sites and direct-to-garment fulfillment opportunities that were added to the Art Gun platform since the beginning of the 2013 fiscal year.
Robert W. Humphreys, Delta Apparel's chairman and chief executive officer, commented that while the company's second quarter was not as strong as expected, it is still on track to meet its full-year guidance. "During the second quarter we completed several projects that are designed to reduce costs and leverage customer relationships. The Game's basic tee products now employ a completely vertical production model extending from textiles through screen printing. This provides a low cost structure and facilitates rapid product replenishment. The Salt Life brand continues to gain in popularity. Our Fall 2013 line received an excellent reaction from buyers at the recent Surf Expo in Orlando, Florida, and we are making good headway in establishing the brand on the West Coast."