• Q3 earnings up from US$2.5m to $4.5m
  • Non-adjusted revenues down to $104.3m
  • Branded sales dampened by prior-year Junkfood addition, retailer bankruptcies

US apparel manufacturer Delta Apparel has posted another quarter of higher earnings following its divestment of the Junkfood brand earlier this year. 

The company said for the third quarter ending 1 July, net income grew to US$4.5m compared with $2.5m a year earlier. Operating income was also higher at $5.9m from $4.2m.

Sales were lower at $104.3m from $111.6m a year earlier but when adjusted to exclude the comparison to Junkfood's results a year earlier, sales grew 4% year-on-year.

Junkfood was sold in April to JMJD Ventures for $28m with Delta saying the changing retail environment had made it "more challenging to be a niche player in the licensed-graphics space". 

Delta Apparel offloads Junkfood T-shirt subsidiary for US$28m

On a per segment basis, sales in its Basics business, which includes Activewear, Delta Catalog and Fun Tees, grew 9.6% to $79m. This was despite a $0.7m drop in sales in its Art Gun brand, resulting from the loss of a key customer together with delayed new partner launches "stemming from general market softness", said the company.

The branded segment saw sales fall to $25.3m compared to $39.5m. This was primarily down to the year before results including $11.3m worth of sales from the since divested Junkfood business, as well as the impact of retailer bankruptcies.

"The company overall had a solid third-quarter. Adjusting sales for the divestiture of Junkfood, our consolidated net sales increased 4% in the third quarter, with earnings per diluted share up approximately 14% over the prior year quarter.  We continue to be pleased with our e-commerce business, which achieved year-over-year sales growth of 41% on our consumer sites during the quarter after excluding prior year Junkfood e-commerce sales, and 15% on our business-to-business sites during the quarter," says Robert Humphreys, Delta Apparel CEO.