Delta drops guidance after slow holiday

US: Delta drops guidance after slow holiday

By just-style.com | 9 January 2007

Active wear apparel firm Delta Apparel is expecting second-quarter revenues to be approximately US$72 to $73m versus its prior expectation of $74 to $78m.

The company said that earnings are now expected to be in the range of $0.05 to $0.07 per diluted share versus its prior guidance of $0.14 to $0.18.

Although Delta saw selling price improvements from the first quarter, the weak retail environment during the holiday season meant that price targets and sales volumes had to be revised.

Delta president and CEO Robert Humphreys said: "We anticipate adjusting our manufacturing schedules in the second half of the year to reflect the lower activewear sales."

For the full fiscal year, the company is lowering its sales expectations to $315 to $330m from its prior guidance of $325 to $340m. The company now expects full-year diluted earnings per share to be in the range of $1.33 to $1.46 per diluted share, versus its prior guidance of $1.81 to $2.00 per diluted share.

Humphreys added: "Our second quarter performance was primarily impacted by slower than projected sales in our non-branded activewear business, which missed expectations by approximately $5m.

"Second-quarter sales in our Junkfood business strengthened over the first quarter and were in-line with our expectations. We are experiencing margin pressures in the licensed T-shirt business and continue to see weakness in re-orders from several key customers.

"Strategically, we remain focused on broadening Junkfood's range of licensed products, developing our 'Sweet n Sour' label for the mid-tier channel and growing our foreign distribution."

Sectors: Apparel, Finance, Manufacturing

Companies: Delta Apparel