Delta Apparel Releases Report On Its Fiscal Third Quarter And Year-To-Date
Supplier Delta Apparel, Inc. (UPIC: delta03) has reported its earnings for the third quarter and first nine months of its fiscal year, noting $111.6 million and $310.9 million in net sales, respectively.
The third quarter’s figures exclude a $1.8 million pre-tax charge taken during the quarter in connection with a manufacturing realignment comprised of $1.6 million in restructuring activities and $0.2 million in manufacturing inefficiencies. While net sales in the 2016 third quarter were negatively impacted by continued weakness in the retail environment and the absence of the Kentucky Derby license, which the company did not seek to renew for this year, Delta Apparel notes that continued strong gross margins resulted in a year-over-year margin expansion of 150 basis points.
The Greenville, South Carolina, company’s net sales for the first nine months of fiscal 2016 include $13 million in sales attributed to the since-divested The Game business and the discontinued Kentucky Derby license. Net income increased to $6.7 million compared to $3.9 million in the prior year period.
Robert W. Humphreys, Delta Apparel, Inc.’s Chairman and Chief Executive Officer, says, “Delta Apparel has completed yet another quarter of solid profitability despite persistent softness in the retail apparel marketplace. Our intense focus on efficiency, cost savings and bottom-line growth that began nearly two years ago with various strategic initiatives has positioned us to compete from a position of strength even when the marketplace is weak. Our continued focus on those areas has resulted in a rigorous manufacturing realignment that is expected to significantly reset our manufacturing cost structure and carry an annual savings of approximately $8 million, or $0.70 per diluted share, beginning in the first half fiscal 2017 and becoming fully annualized by our 2017 fiscal year-end.
“We believe Delta Apparel will continue to make solid progress over the next several quarters. While our recent initiatives have focused a great deal on improving margins and strengthening our bottom line, we are confident that the strength of our on-trend, high-quality products and solid marketing programs will bring renewed vigor to our top line as well. We are looking forward to a strong fourth quarter and continued success in 2017.”
For more information on the company’s financial performance, click here.