Delta Apparel, Inc. confirmed its outlook for the fourth quarter and fiscal year ending June 28, 2008.
For the fourth quarter, the DLA continues to expect sales to be in the range of $88 million to $98 million and diluted earnings per share to be in the range of 40 to 46 cents. For the full year, the company continues to expect sales to be in the range of $305 million to $315 million and diluted loss per share to be in the range of -10 cents to -16 cents, inclusive of restructuring related expenses of -39 cents per diluted share.
“Despite the softening U.S. economy and ongoing challenges at retail, our business during the quarter has remained on plan,” said Robert W. Humphreys, president and CEO. “Over the past few months we have continued to expand our Junkfood business through our normal distribution channels as well as our partnership with GapKids and BabyGap. At the same time, our new Honduran manufacturing facility recently achieved its weekly production goal of 500,000 pounds per week and will continue to increase output into the next fiscal year. While some market segments are being impacted by the current weakness at retail, our broad distribution channels are allowing us to meet our overall sales and profitability targets.”
The company noted that the bankruptcy filing of a customer will result in an increase in accounts receivable reserves, impacting earnings by approximately 6 cents per diluted share in its fourth fiscal quarter. The company recognizes the potential of higher credit risk during current economic conditions and is closely monitoring its exposure. Despite these additional reserves, Delta Apparel, Inc. believes it will meet its previously announced earnings expectations for the fourth fiscal quarter.
