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July 22, 2021

Delta Apparel Q3 net sales forecast to surge 65%

Activewear and lifestyle apparel maker Delta Apparel expects third-quarter net sales to be up 65% on last year and amount to about US$118m.

By Beth Wright

The total would mean Delta Apparel’s third-quarter net sales for the three months to 3 July would be roughly flat to the same period in fiscal 2019.

The retailer said the stronger than anticipated sales performance reflected exceedingly strong Salt Life Group revenue across all sales channels. In particular, direct-to-consumer sales grew in excess of 150% compared to the third quarter of fiscal 2019.

Delta Activewear also outperformed sales expectations, with strong demand from retail license and brand direct customers. The favourable mix of higher margin, direct-to-consumer revenue combined with the benefit of lower product costs still flowing through cost of sales, drove gross margin improvement of over 200 basis points from the March quarter.

Meanwhile, stronger sales, higher gross margins and continued leverage of general and administrative expenses is expected to result in earnings of over $0.90 per diluted share for the company’s fiscal 2021 June quarter.

“Our June quarter performance is a true testament to the power of our diversified business model,” said CEO Robert Humphreys. “The strong emotional connection to our Salt Life lifestyle brand drove robust consumer engagement that far exceeded our expectations and further validated our belief in this aspirational brand. As we announced last week, we are opening two new retail doors: one in Myrtle Beach, South Carolina, and one in Galveston, our first store in the state of Texas. With twelve Salt Life stores already opened, we have proven the success of this omni-channel shopping experience for consumers.

“We now plan to accelerate our investments in this key sales channel, and look to further expand the Salt Life brand reach with at least five additional retail locations in 2022.”

In addition, Humphreys hailed the Delta Group segment teams’ ability to ramp up manufacturing capacity and capitalise on accelerating demand across sales channels.

“The June quarter is typically our strongest selling period of the year, and we delivered results significantly ahead of expectations considering the inventory constraints and supply chain disruptions we experienced during the quarter. We continue to see high demand from large retail and global brand partners seeking the products and value-added services we can uniquely deliver within the Delta Group segment.

“Both of our business segments are strongly positioned in the marketplace and have initiatives well underway to capitalize on the momentum we are experiencing. I’m bullish about our future and am more confident than ever about our ability to deliver sustainable, profitable growth for years to come.”

Final and complete financial results for the company’s fiscal year 2021 third-quarter will be released after the market closes on 5 August.

Delta Apparel last month acquired tech provider

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