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February 9, 2021

Delta Apparel sees Q1 profit dive

By Hannah Abdulla

The management team of activewear supplier Delta Apparel remains upbeat despite the company seeing net profits slide during the first quarter, which it attributed to inventory constraints, hurricane-related disruptions in Central America, and freight carrier limitations during the holiday season.

For the three months ending 2 January, net sales fell to US$94.7m from $95.9m a year earlier.

Operating income was US$3.1m versus $2.6m a year earlier. Net income attributable to shareholders slid 4.5% to $0.9m.

“Fiscal 2021 is off to a strong start with our first-quarter sales and profitability results well ahead of our internal expectations,” said Robert Humphreys, chairman and CEO. “Despite notable headwinds from inventory constraints, hurricane-related disruptions in Central America, and freight carrier limitations during the holiday season, our results were bolstered by strong order demand and impeccable manufacturing and operational execution at all levels.

“We were particularly pleased with the accelerating success of our retail model within the DTG2Go digital print business. DTG2Go gained significant traction during the quarter with traditional retailers utilising our on-demand, seamless supply chain to expand their business. We also capitalised on market opportunities that fueled growth and expanded profitability in our activewear business, overcoming the challenges caused by inventory constraints. Within our Salt Life Group segment, revenue and improved margins were propelled by robust direct-to-consumer sales.

“Our business is firing on all cylinders as we continue to ramp our manufacturing output to record levels to keep up with the high demand we have in our pipeline. Our strong first-quarter results and solid balance sheet have positioned us well to deliver against our goals for the fiscal year, and I could not be more proud of our teams.”

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