Delta Apparel, Inc. posted solid results for the fiscal year ended July 2, but the company took a big step back in the fourth quarter as sales at both the Delta and Soffe divisions declined for the period. Total fourth quarter sales were down more than 9.0% to $66.3 million, compared to $72.9 million in the year-ago period, a decline DLA said was due, at least in part, to one less week in the fiscal calendar this year. Net income fell 40.9% in the period to $3.2 million, or 37 cents per diluted share, compared to $5.4 million, or 64 cents per diluted share, in Q4 last year.
Sales at MJ Soffe were down nearly 18% in the fourth quarter to $25.6 million, compared to roughly $31.1 million in the year-ago period. DLA said about $2.2 million of the $5.5 million decline was due to the loss of the extra week. The Soffe decrease was across all channels, with sporting goods representing about half, or a 14% decline, of the shortfall. However, re-orders for July were strong, driving a 17% increase for the month. Military sales were down 23% in Q4, but are up 23% for July.
Delta sales dipped about 2.4% for the period to $25.6 million on the shorter quarter and “supply limitations in the basic tee category.” For the year, catalog direct sales made up 79% of sales, while private label represented 20%, and distributors delivered about one percent of the total. DLA does not expect to have distributor sales going forward.
Delta made another acquisition last week, acquiring Junkfood Clothing in a deal worth $20 million plus incentives. Junkfood markets nostalgic rock and cartoon t-shirts.
Delta Apparel, Inc. | |||
Fiscal 2005 Results | |||
(in $ millions) | 2005 | 2004 | Change |
Total Sales* | $228.1 | $208.1 | 9.6% |
Delta Apparel | $143.4 | $137.4 | 4.4% |
Soffe* | $84.6 | $71.8 | 17.8% |
Operating Income | $20.1 | $17.0 | 18.3% |
Delta Apparel | $10.0 | $7.6 | 32.0% |
Soffe | $10.4 | $9.6 | 8.3% |
Gross Margin | 23.6% | 23.2% | +40 bps |
SG&A | 16.6% | 14.9% | +170 bps |
Net Income | $11.2 | $9.73 | +15.5% |
Diluted EPS | $1.33 | $1.16 | +14.7% |
Inventories @ Yr-End | $99.0 | $105.9 | -6.5% |