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May 7, 2019

Delta Apparel sees strong start despite Q2 profit fall

By Hannah Abdulla

Activewear and lifestyle apparel maker Delta Apparel has reported a fall in year-on-year net profit for the second quarter, on the back of higher-costs, digital print acquisition integration expenses and delayed spring sales.

Net profit for the three months to 30 March fell to US$942m from US$3.6m a year earlier while operating income was lower at US$2.7m from US$5.6m against the same period last year.

But sales grew 3% to $102.8m. Cost of goods sold, however, rose to $83.9m from $77.7m, driving gross profit down to $18.9m from $22.2m a year earlier.

CEO Robert Humphreys noted challenges from “unseasonable weather” in the group’s key markets and a later spring break this year.

“Both our Delta Group and Salt Life Group segments achieved top-line growth for the first half of the year and we are off to a strong start to the second half. We see exciting opportunities for growth and increased profitability across all of our businesses as we leverage our investments in manufacturing technology and distribution, and expand into additional sales channels. We continue to believe Delta Apparel is uniquely positioned to succeed in today’s dynamic retail environment.”

For the half-year period, net loss narrowed to $209,000 from $6.3m a year earlier while operating income was $2.7m, down from last year’s $7.35m. Net sales grew to $204.5m, up 7.4% against last year.

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