Delta Apparel Reports FY13 Fourth Quarter and Year-End Results
For the fourth quarter, branded segment sales totaled $55.5 million versus $57.9 million in the 2012 fourth quarter. The double digit sales increases posted by The Game, Junkfood and Art Gun in the fourth quarter were more than offset by the previously mentioned softness that continued in the Soffe business.
Basics Segment Review
Strong unit sales growth in both Delta Catalog and FunTees resulted in a 6.3 percent net sales increase in the basics segment, which reached $270.9 million compared to $254.7 million in fiscal 2012. A 14 percent gain in unit sales for the segment was offset by lower average selling prices. Gross margins in both businesses were significantly improved in fiscal 2013 due primarily to improved manufacturing performance.
Net sales for the basics segment in the 2013 fourth quarter were up slightly to $78.0 million compared with $77.5 million in the 2012 fourth quarter. Both the Delta Catalog and FunTees businesses contributed to the sales increase while also expanding gross margins.
Robert W. Humphreys, Delta Apparel's chairman and chief executive officer, commented that the strategies Delta has executed over the past eighteen months are paying off in greater unit sales and improved margins, which are having the anticipated positive effect on net income. "We're pleased that the strong performance of nearly all of our businesses has more than offset the weakness in Soffe, which has not yet turned the corner."
"In that regard, we have implemented significant measures to improve Soffe's unit sales and margins, and to bring its financial results in line with the performance of our other businesses. We have made some important changes in Soffe's key management to lead the efforts in rebuilding the brand. We are already receiving positive feedback from customers on Soffe's spring 2014 product offerings, and are hopeful this will equate to growth in the back half of fiscal 2014. We have modernized Soffe's screen print operations, closed its Wendell, North Carolina decoration facility, and consolidated those operations within the Fayetteville printing facility. We have also taken additional measures to reduce SG&A costs at Soffe. We believe these and other initiatives that we will take over the next few quarters will return Soffe to profitability in fiscal 2014."