Delta Apparel, Inc. expects second quarter revenues to be approximately $72 to $73 million versus its prior expectation of $74 to $78 million. Earnings are now expected to be in the range of five cents to seven cents per diluted share versus its prior guidance of 14 cents to 18 cents.
For the full fiscal year, the Company is lowering its sales expectations to $315 to $330 million from its prior guidance of $325 to $340 million. The Company now expects diluted earnings per share to be in the range of $1.33 to $1.46 per diluted share for the 2007 fiscal year versus its prior guidance of $1.81 to $2.00 per diluted share.
Robert W. Humphreys, the Company's President and Chief Executive Officer commented, “Our second quarter performance was primarily impacted by slower than projected sales in our non-branded activewear business, which missed expectations by approximately $5 million. Although we did see selling price improvements from the first quarter, the weak retail environment during the holiday season hurt our ability to achieve the price targets and sales volumes we forecasted. We anticipate adjusting our manufacturing schedules in the second half of the year to reflect the lower activewear sales.
“Second quarter sales in our Junkfood business strengthened over the first quarter and were in-line with our expectations. We are experiencing margin pressures in the licensed t-shirt business and continue to see weakness in reorders from several key customers. This is not consistent with our previous expectations, therefore, we are revising our forecast for the second half of the year to reflect this concern. Strategically, we remain focused on broadening Junkfood's range of licensed products, developing our 'Sweet n Sour' label for the mid-tier channel and growing our foreign distribution.
“Despite the near-term challenges in our business, we remain confident that we are building a strong platform for growth and believe the competitive position and operational capabilities of our business remain very healthy. We look forward to working through the remainder of our FunTees integration project and pursuing our many opportunities for enhanced profitability and sales growth.”
