Delta Apparel Inc. announced last week that it expects fiscal first quarter results will come in below previous expectations, due in large part to lower sales in its Junkfood clothing line. Delta, which is also the parent company to M.J. Soffe, now sees EPS for the quarter ended September 30 in the range of 25 cents to 27 cents per share versus prior guidance of between 41 cents to 45 cents per share.
First quarter earnings included a gain associated with the final earn-out payment made to former M.J. Soffe shareholders, which equaled nine cents per share.
First quarter revenues are now seen in the range of $61 million to $63 million versus its prior estimates of $64 to $68 million. Sales were said to be below expectations in the Junkfood business, which was acquired in August 2005, but revenue in the Delta Apparel business was also lower than expected although outpacing the previous year quarter. Management also said that Q1 margins were “depressed by weak pricing and promotional freight costs.”
For the full fiscal year, DLA continues to expect net sales in the range of $325 million to $340 million, but diluted EPS is now forecast to be in the $1.81 to $2.00 per diluted share range for the fiscal year, compared to prior guidance of $1.91 to $2.05 per diluted share.
