Activewear manufacturer Delta Apparel has swung to a first quarter loss, blaming tough comparisons with a shareholder payment of $0.7m in the prior year period and textile restructuring costs.

The company reported a net loss of US$1.5m, compared to the prior year's net income of $2.2m.

Delta said its restructuring charges began during the fiscal fourth quarter of 2007 and are expected to impact financial results until the third quarter of fiscal 2008.

Net sales for the three months increased 15.8% to a first quarter record of $72.6m, driven primarily by the acquisition of FunTees and sales growth of its Junkfood business.

These gains were partly offset by lower sales of Soffe products and undecorated T-shirts.

In July the company announced an overall restructuring plan which included the closing of its Fayette, Alabama manufacturing facility, the expensing of excess manufacturing costs with the FunTees integration and start-up costs stemming from the opening of its Honduran textile facility.

The company expects to incur total costs of approximately $11.8m associated with the restructuring. The expenses impacted the first quarter by $2.1m, the company added.

Robert W Humphreys, president and CEO, said: "Our first quarter financial results were negatively impacted by our previously announced textile restructuring costs and slower than expected results at Soffe, which were driven by a weak retail environment and certain production and sourcing constraints.

"Our retail partners continue to give us positive feedback on our Soffe products and our internet sales are growing steadily.

"The general slowdown in apparel sales is causing some retailers to delay call-outs, making us cautious until we see more sustained trends during our peak selling season this spring.

"We are pleased that our Junkfood business continued to grow during the quarter and has a good order backlog going into our second quarter.

"We have established additional customer relationships in this business which should provide further growth opportunities in the future."

For the second fiscal quarter Delta expects sales to be in the range of $64 to $68m and a loss in the range of ($0.33) to ($0.37) per diluted share, including around $1.9m of restructuring related expenses.