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Delta sees improved margins in activewear segment
24 Oct '09
5 min read
Activewear Apparel
The activewear segment, comprised of the Delta catalog and FunTees businesses, had sales of $47.1 million for the three months ended September 26, 2009, a decrease of 5.7% compared to the prior year first quarter. FunTees sales grew 1.1% from the prior year quarter as revenue per unit increased from selling a higher mix of decorated products. This increased per unit revenue was partially offset by a decline in the number of units sold during the quarter. Unit sales were flat in the Delta catalog business; however, revenue declined 8.7% as a result of lower average selling prices.
Selling prices in the first quarter of the prior year were strong but declined as fiscal year 2009 progressed. Pricing on basic tees has stabilized, but remains approximately 7% lower than a year ago. The activewear segment had an operating loss of $1.1 million for the first quarter of 2010, a $1.8 million improvement from the prior year first quarter. Manufacturing costs improved from the prior year first quarter as the cost-savings associated with Ceiba Textiles were recognized and the production of off-quality goods was reduced.
Fiscal 2010 Guidance
For the 2010 fiscal year ending July 3, 2010, the Company reiterates its expectations for net sales to be in the range of $360 to $380 million and earnings to be in the range of $0.80 to $1.00 per diluted share. These projected results compare to fiscal year 2009 sales of $355.2 million and earnings of $0.76 per diluted share.
While the Company remains concerned about the U.S. economy, it believes it has taken into consideration the heightened risk factors associated with the current economic climate. Significant deterioration in the economy could, however, negatively impact the Company's ability to achieve its expectations.
Mr. Humphreys concluded, “We remain excited about the future opportunities for Delta Apparel, Inc. Our management team is focused on executing our current initiatives to maximize operating performance. In addition, we continue to identify new opportunities in all key areas of our business, including brand marketing, additional license agreements, key customer targets, new product extensions and cost-savings initiatives. We are optimistic about the growth opportunities ahead of us for 2010 and beyond, and believe we are in a strong position to increase shareholder value in the future.”
The activewear segment, comprised of the Delta catalog and FunTees businesses, had sales of $47.1 million for the three months ended September 26, 2009, a decrease of 5.7% compared to the prior year first quarter. FunTees sales grew 1.1% from the prior year quarter as revenue per unit increased from selling a higher mix of decorated products. This increased per unit revenue was partially offset by a decline in the number of units sold during the quarter. Unit sales were flat in the Delta catalog business; however, revenue declined 8.7% as a result of lower average selling prices.
Selling prices in the first quarter of the prior year were strong but declined as fiscal year 2009 progressed. Pricing on basic tees has stabilized, but remains approximately 7% lower than a year ago. The activewear segment had an operating loss of $1.1 million for the first quarter of 2010, a $1.8 million improvement from the prior year first quarter. Manufacturing costs improved from the prior year first quarter as the cost-savings associated with Ceiba Textiles were recognized and the production of off-quality goods was reduced.
Fiscal 2010 Guidance
For the 2010 fiscal year ending July 3, 2010, the Company reiterates its expectations for net sales to be in the range of $360 to $380 million and earnings to be in the range of $0.80 to $1.00 per diluted share. These projected results compare to fiscal year 2009 sales of $355.2 million and earnings of $0.76 per diluted share.
While the Company remains concerned about the U.S. economy, it believes it has taken into consideration the heightened risk factors associated with the current economic climate. Significant deterioration in the economy could, however, negatively impact the Company's ability to achieve its expectations.
Mr. Humphreys concluded, “We remain excited about the future opportunities for Delta Apparel, Inc. Our management team is focused on executing our current initiatives to maximize operating performance. In addition, we continue to identify new opportunities in all key areas of our business, including brand marketing, additional license agreements, key customer targets, new product extensions and cost-savings initiatives. We are optimistic about the growth opportunities ahead of us for 2010 and beyond, and believe we are in a strong position to increase shareholder value in the future.”
Delta Apparel
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