• Q4 net loss of US$0.8m
  • Sales fall to $114.9m
Delta expects to take further action regarding its rationalisation

Delta expects to take further action regarding its rationalisation

US clothing business Delta Apparel has moved to a net loss in its fourth quarter due to poor market conditions and strategic initiatives implemented in the period to improve performance.

The company experienced a net loss in the quarter ended 27 September of $0.8m, from earnings of $0.6m a year earlier. Adjusted income in the period amounted to $1.7m.

Fourth-quarter sales dropped to $114.9m, compared with $122.6m in the prior year September period.

In response to prolonged sluggishness within the apparel markets and to better position the company as market conditions improve, in its fourth-quarter the company initiated a reorganisation to streamline decision-making and reduce duplicative and excess fixed costs. It also began evaluating other initiatives focused on improving profit, including a rationalisation of its manufacturing operations, product lines and sales channels.

CEO Robert Humphreys, said: "With minor exceptions, we have streamlined our administrative workforce and completed the planned reductions, effectively delayering the management structure across all business units. We anticipate recognising almost $6m of the expected $7m in annualised savings in fiscal year 2015."

Humphreys added that the company expects to take further action regarding its rationalisation of certain product lines and sales channels moving forward.

"Although we are not yet in position to provide detail regarding these initiatives under consideration, we believe these actions will provide additional positive impacts on our business in fiscal 2015 and beyond."