Delta Apparel reported its second consecutive quarter of record sales as total revenues for the fiscal third quarter ended March 27 spiked 26.0% to $107.9 million from $85.7 million in the year-ago period on double-digit strength from both of business segments.
Earnings per share for the Greenville, SC-based apparel manufacturer jumped from 14 cents per diluted share to 34 cents per diluted share on a bottom line that improved to $3.0 million from $1.2 million in the yearago period. Margins improved for both business segments, driving overall gross margins up 370 basis points to 23.3% of sales.
In a conference call with analysts, company Chairman and CEO Robert Humphreys attributed growth to diversified distribution channels, broad product offerings, a portfolio of brands and extensive license agreements.
By business segment, the retail-ready segment, which consists of the Soffe, Junkfood, To The Game and Art Gun businesses, continued strength by posting sales of $46.3 million, a 42.9% improvement from the year-ago period. Excluding sales of recently acquired To The Game and Art Gun, sales grew organically by 17.9% for the quarter.
Management said sales growth was driven primarily by 69.7% growth at Junkfood along with a strong quarter from Soffes department store channel. Gross margins in the retail-ready segment increased 50 basis points compared to the year-ago period.
For the Activewear segment, which is comprised of the Delta Catalog and FunTees brands, sales improved 15.7% to $61.7 million for Q1. Growth from Delta Catalog was partially offset by sales declines at FunTees which resulted from lower unit sales. Gross margins in the Activewear segment grew 350 basis points versus fiscal Q3 last year.
Regarding outlook, Delta boosted guidance for the year ended July 3, forecasting sales to be in the range of $400 to $405 million and earnings to be between $1.20 and $1.30 per diluted share.
