• Earnings for the three months ended 31 March dropped to US$3.6m from $4.5m.
  • Net sales for the second quarter were $100m from $104.1m last year.
  • "We believe that Delta Apparel is well-positioned for more organic growth and a strong finish to fiscal year 2018," said CEO Robert Humphreys.

US activewear maker Delta Apparel has offered an optimistic outlook despite booking earnings and sales declines in its second-quarter due to the divestment of its Junkfood clothing business.

Earnings for the three months ended 31 March dropped to US$3.6m from $4.5m a year earlier. Excluding the sale of the company's Junkfood business, Delta made a profit of $0.48 per diluted share over the prior year's $0.47 per diluted share.

Gross margin narrowed to 22.2% from 23.3% last year as gross margin expansion in the firm's branded segment and DTG2Go business (previously Art Gun) was offset by a decline in the activewear business due to higher raw material and other input costs.

Net sales for the second quarter were $100m from $104.1m last year, but were up 2% after excluding $6m of sales in the prior year period from the company's divested business.

"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 CEO Robert Humphreys. "The combination of our Art Gun business with the recently-acquired digital print business is a game-changer from our perspective. 

"The combined business, which we now market under the DTG2Go trade name, gives us the most comprehensive on-demand solution in the high-growth digital print space.  DTG2Go's multi-location footprint offers customers quick-turn shipments to any part of the United States as well as market-leading international shipping competency."

Delta is hoping the investment in its digital print and fulfillment model, and new product and category extensions will lead to incremental benefits.

"Our manufacturing platform continues to operate efficiently and we are excited about our opportunities to increase volumes and further capitalise on our additional capacity and functionality," added Humphreys. "All things considered, we believe that Delta Apparel is well-positioned for more organic growth and a strong finish to fiscal year 2018."