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Georgia-based apparel company sees loss for third quarter

11
Apr '08
Delta Apparel Inc announced preliminary financial results for the third quarter ended March 29, 2008 and updated its current business outlook.

The Company now expects third quarter fiscal 2008 revenue to be approximately $75 million and expects a loss per diluted share in the range of ($0.05) to ($0.07), inclusive of approximately ($0.07) of textile restructuring charges per diluted share.

These restructuring costs are expected to be the final charges relating to the Company's previously announced textile restructuring plan.

These preliminary results compare to the Company's prior expectation of third quarter revenues between $84 to $88 million and diluted earnings per share in the range of $0.25 to $0.29.

Although sales in the retail-ready segment increased from the prior year third quarter, the Company did not achieve its original revenue targets for this segment due primarily to the overall slowdown of consumer demand for apparel.

As a result of the high margin contribution from this segment, the modest sales shortfall to expectations disproportionately reduced the Company's third quarter profitability.

At the same time, sales in the activewear segment were lower than in the prior year quarter and were also below expectations for both the catalog and private label channels.

While the Company believes that it is servicing its private label customers well, weakness in consumer spending is slowing the callouts of these products.

In addition, overall weak demand combined with higher energy, transportation and raw material costs are creating a difficult marketplace for undecorated tees.

Robert W. Humphreys, President and Chief Executive Officer, commented “Although we are not meeting our expectations and are not satisfied with our performance, we did see steady progress towards profitability throughout the third quarter.

This quarter should finalize the previously discussed restructuring related charges. Excluding these textile restructuring costs, our quarterly performance would have been break-even despite the tough retail environment.


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