Published
May 10, 2018
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Delta Apparel makes gains with basics and direct-to-garment printing

Published
May 10, 2018

Greenville, South Carolina-based Delta Apparel, Inc. reported its first quarter and first half 2018 results on Monday, with moderate growth in the group’s basics segment dampened by its branded division.


Salt Life was a highlight in Delta's Q1 - Instagram: @realsaltlife

 
Net sales for the second quarter ended March 31, 2018 were $100.0 million compared to $104.1 million in the previous year. The company did, however, emphasize that this figure is an increase of $1.9 million, or 2%, when the $6.0 million gain attributable to Junkfood Clothing – sold to JMJD last year – is subtracted from the 2017 total.
 
Net income came to $3.6 million.

The group’s basics segment saw revenues rise 4% to $73.7 million in the quarter. Activewear sales rose 2%, led by a 15% increase in catalog sales but offset by a decline in private label sales.
 
Within this segment, the second quarter also saw the acquisition of direct-to-garment printing company DTG2Go in March. This new acquisition was combined with Delta’s existing printing brand Art Gun (under the name DTG2Go) and achieved a 60% increase in sales Q2.
 
This progress was offset somewhat by Delta’s branded segment which saw revenues drop to $26.3 million from $33.3 million in the prior year period, due in part to the company’s decision to divest itself of Junkfood Clothing in March of last year.

Sales of Delta’s Soffe brand also fell slightly in the quarter from $12.8 million to $12.4 million, although they grew almost 10% in the first six months of the fiscal year, driven by e-commerce and inclusive sizing initiatives.
 
Delta also highlighted the performance of Salt Life, whose sales rose 7%, with progress made across most channels.
 
“Our fiscal 2018 second quarter was both productive and profitable, with year-over-year organic sales and earnings growth in market conditions that remained challenging,” said Delta Apparel Chairman and CEO Robert W. Humphreys in a release.
 
“Despite an uneven retail environment and cost pressures in a number of areas, our overall first-half performance was solid and our team is focused on strategies that should meaningfully impact both the top and bottom lines.”
 
In the first six months of fiscal 2018, Delta’s net sales rose to $190.3 million from $189.5 million in the first half of 2017, up 9% when excluding the $15.4 million of sales accounted for by Junkfood Clothing in the prior year period.
 
Net loss for the period was $6.3 million, including a $10.6 million charge related to the United States tax reform legislation.
 
Excluding the negative effects of the tax charge, earnings were $4.2 million, up 12% from $3.9 million.
 

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