Q3FY15 net income plunges at Delta Apparel
Net income at US garment retailer Delta Apparel plunged to $2.2 million in Q3FY14 ending June 28, 2014, from $4.0 million in Q3FY13.
In Q3FY14, NYSE-listed Delta Apparel Inc posted net sales of $123.5 million, which too is down from $133.6 million in the corresponding quarter of previous fiscal year.
Delta Apparel reported a $0.27 per diluted share in the quarter under review against $0.48 per diluted share posted in the same quarter of FY13.
Responding to its financial performance and near-term view of business conditions, Delta Apparel has initiated a reorganization of its administrative structure at all levels to streamline decision-making and information flow as well as reduce duplicative and excess fixed costs.
In addition, it is also evaluating other initiatives focused on improving net profitability in the face of continued marketplace weakness.
These initiatives include, restructuring the manufacturing platform to lower product cost and strategically reduce capacity on certain product lines and a comprehensive rationalization of all business units, product lines and sales channels.
Within segments, net sales for the basics segment were $73.5 million in Q3FY14, down 5.8% from $78.0 million in the prior year period.
Delta Apparel said, sales of basic, undecorated tees continued to suffer from weak demand and an over-inventoried environment driving ongoing promotional price discounting.
The branded sales segment reported revenues of $50.0 million compared with $55.5 million in Q3FY13, down 9.9%.
According to Delta apparel, two brands, Salt Life and Art Gun continued their double-digit sales growth during the quarter but not at a pace adequate to offset sales declines in the other branded segment businesses.
Sales of Salt Life branded products increased 16% in the June quarter over the prior year quarter. Art Gun, reflecting the expanding popularity of ecommerce purchasing, enjoyed sales growth of nearly 25% for the quarter, continuing the strong growth trends of the past several quarters.
Another brand, The Game began shipments to college bookstores in the June quarter and its college sales were on par with the prior year, Delta Apparel revealed.
One more brand - Junkfood experienced very strong growth with its boutique and specialty store customers during the quarter. Although this growth was significant, unsettled conditions within one of Junkfood’s large retail customer groups hampered sales and resulted in an overall sales decline at Junkfood of nearly 20% for the third quarter.
Soffe sales during the quarter were not as strong at Delta Apparel as anticipated despite returned placements at major mid-tier retailers. Overall weakness in other Soffe sales channels offset the incremental mid-tier placements, resulting in a sales decline of about 10% in the third fiscal quarter.
Fibre2fashion News Desk - India