Delta Apparel’s Q1 Report Shows Sales Up 13 Percent

Delta Apparel, Inc. (PPAI 188431) has announced financial results for its fiscal year 2019 first quarter, which ended December 29, 2018. The Greenville, South Carolina-based supplier reported net sales up $101.7 million, up 12.5 percent from the same quarter last year, and a 13 percent year-over-year increase in gross profits to $18.6 million.

“Our team delivered a strong start to the new fiscal year and we are pleased with the wide-ranging performance we saw across our business during the first quarter, including double-digit sales growth in both our Delta Group and Salt Life Group segments,” says Robert W. Humphreys, the company’s chairman and CEO. “The continuing expansion of our digital print business, DTG2Go, which grew over 250 percent during the quarter, and double-digit sales growth in our Salt Life lifestyle brand were key drivers in our results.”

Net sales in the Delta Group, comprising the DTG2Go digital print business, Delta Activewear business and Soffe brand, increased 12.5 percent, while the Salt Life Group, which includes the Salt Life and Coast lifestyle brands, increased 13.5 percent.

The company’s operating income for the quarter was $117,000 compared to $1.7 million in first quarter 2018. It attributes the decrease to a discrete expense of $2.5 million taken during the quarter in connection with the resolution of litigation stemming from The Sports Authority's March 2016 bankruptcy. Excluding that expense, Delta Apparel’s operating income was $2.6 million, up 49 percent from the $1.7 million last year. Delta Group segment operating income was impacted by the litigation expense and came in at $2.8 million, compared to $4.4 million in the prior year first quarter. Excluding that expense, Delta Group's operating income improved by approximately $800,000, or 18.5 percent, over the prior year. Salt Life Group segment operating income was approximately $400,000, up 58 percent from roughly $200,000 in the prior year first quarter.

Humphreys adds, “We believe we are well-positioned for more growth as we look to further capitalize on our industry-leading position in the digital print space, leverage our vertical manufacturing platform and increase consumer awareness of our Salt Life lifestyle brand through new product categories as well as growth with national and regional retailers and our own direct-to-consumer channels. This is an exciting time for Delta Apparel and we are extremely optimistic about our prospects going forward.”

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