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February 6, 2018updated 12 Apr 2021 2:35pm

Delta Apparel Q3 losses widen on tax charges

Despite a pick-up in holiday demand for apparel, US activewear maker Delta Apparel saw its net losses widen in the first quarter, as a one-off tax charge and a margin decline in the basics segment weighed on results.

Despite a pick-up in holiday demand for apparel, US activewear maker Delta Apparel saw its net losses widen in the first quarter, as a one-off tax charge and a margin decline in the basics segment weighed on results.

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For the quarter ended 30 December, net losses reached US$9.95m from $607,000 in the year ago quarter. During the period, the company recognised a discrete provisional tax expense of $10.6m associated with the recent US tax reform legislation, which impacted earnings by $1.45 per share.

Gross margin for the quarter improved significantly within the branded segment, expanding to 37.2% from 31.1% in the prior year period. This was offset, however, by a margin decline in the basics segment due to higher raw material costs, resulting in an overall gross margin of 18.1% from 20.6% in the prior year period.

Net sales, meanwhile, reached $90.3m from $85.3m a year ago, boosted by a 20% increase in both basic and activewear segment sales. The latter was boosted by significant increases at both Catalog and FunTees.

In the branded segment, sales grew 14% year-over-year to $17.2m, after excluding sales of $9.4m in the prior year period from the company’s since-divested Junkfood business.

“With double-digit growth across the board and improved operating earnings, we are pleased with our results in what is usually our most challenging seasonal quarter,” said CEO Robert W. Humphreys. “While the pick-up in holiday demand for apparel was an encouraging development, we believe the time and effort our team devotes to marketing and omni-channel strategies, operational improvements and cost-control initiatives were also key success drivers for us during the quarter.”

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Identify the trends of tomorrow using filings sentiment analysis

Business sentiment continues to improve, showing a clear recovery since the onset of COVID-19. Sentiment in 2021 was up by 8% compared to 2020.   Consumer industries had the highest sequential filings sentiment growth in Q3 2021. Optimism around digital themes and general outlook drove the positive trend in overall business sentiment.   GlobalData’s Filing Analytics Annual Report 2021 on the Consumer industries provides insights into sentiment and mention trends for companies, geographies, and themes. Get real-time analysis of:  
  • Quarterly & annual reports 
  • Earnings call transcripts 
  • IPO filings 
  • Events presentations 
  • ESG filing trends  
Understand the overall outlook for Consumer and spot the topics and themes that will be most impactful in the next few years.   Download the full report to understand what to expect and how to align your business for success.  
by GlobalData
Enter your details here to receive your free Report.

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