Delta Apparel Reports FY13 Third Quarter and YTD Results
Greenville, South Carolina-based Delta Apparel Inc. reported net sales of $120.1 million for its fiscal third quarter ended March 30, 2013, compared to $125.5 million in its 2012 third quarter. Net income for the 2013 third quarter was $1.6 million, or $0.19 per diluted share, compared to $1.9 million, or $0.22 per diluted share, in the 2012 third quarter.
Delta Apparel achieved revenue growth in its basics business and all of its branded business units except for Soffe. However, cooler weather conditions throughout the country combined with continued weakness in certain retail channels resulted in slower than expected overall sales during the third quarter. This, along with continued softness in the Soffe business, resulted in lower comparable third quarter revenue and net income.
For the first nine months of fiscal 2013, net sales increased to $357.0 million from $354.6 million in the comparable period of 2012. Net income for the 2013 nine-month period was $5.2 million, or $0.61 per diluted share. For comparison, the prior year’s nine-month period, which included the second quarter 2012 inventory markdown in the basics segment necessitated by the unprecedented record high cotton costs, resulted in a net loss of $7.3 million, or $0.86 per diluted share.
Branded Segment Review
All of Delta Apparel’s branded segment businesses experienced solid sales growth during the fiscal 2013 third quarter with the exception of Soffe; however, overall branded segment revenue was down 10 percent to $52.6 million, from $58.5 million in the prior year’s third quarter. The decrease was driven entirely by a 30 percent sales decline in the Soffe business, due primarily to turmoil in the current retail environment and a strategic shift by some large retailers from branded products to more private label products. Consistent with Delta Apparel’s other branded segment businesses, The Game saw good third quarter results, with 15 percent sales growth on higher volume and improved gross margins. Sales for Junkfood increased 9 percent with another strong showing in the professional sports license business. Art Gun continued its rapid growth, achieving a 60 percent sales increase in the third quarter and a 95 percent increase for the nine-month period. With the exception of Soffe, each of the company’s branded businesses also experienced sales growth with improved margins for the entire nine months.