Delta Apparel, Inc. reported that fiscal fourth quarter sales slipped a little in light of weakness from remaining business within the retail-ready segment and the activewear segment, but this didn’t overshadow that fact that the Greenville, SC-based apparel manufacturer posted record sales for the full year 2009. The FY09 sales increase was driven by organic growth in each of the company’s four business segments as well as the early Q4 acquisition of headwear manufacturer To The Game.


In the fourth quarter ended , To The Game, driven by strong sales at the Kentucky Derby, boosted overall sales for Delta by $6.8 million, but the company still reported revenues slid to $104.7 million from $105.3 million in the year-ago period amidst a tough retail environment and slowing consumer demand for apparel. Net earnings for the quarter were $4.0 million, or 47 cents per diluted share, as compared to earnings of $4.3 million, or 50 cents per diluted share, in the year-ago period.
By product segment, the Retail-Ready unit, which includes Soffe, Junkfood, and To The Game, posted sales of $50.0 million, essentially flat as compared to sales in the previous year’s fourth quarter.

 

Excluding revenue generated from To The Game, sales decreased 12.9% on weaker consumer spending and retailers who limited “open-to-buy” dollars in order to tighten inventory. Sales for Soffe declined in its military business, as the prior year included sales from the introduction of the new Navy PT uniform, which resulted in a spike in military sales in Q4 of 2008.


Operating income in the Retail-Ready segment was $6.4 million, a decline of $3.0 million from Q4 2008, due to lower sales and deleveraged fixed costs in the businesses.


The Activewear segment, comprised of the Delta and FunTees businesses, reported sales of $54.8 million for the fourth quarter, a 1.7% decline from last year’s $55.7 million in the year-ago period. Sales in the company’s FunTees business increased 17.5%, driven primarily from increased full-package programs with existing customers. Management added that sales have benefited as the company delivers a higher percentage of decorated retail-ready full package product to customers, increasing the revenue received for each unit sold.


Undecorated tees are still in an “oversupplied situation,” which the company said it believes will be the case for a prolonged period of time.  Sales of the Delta basic tees fell 10.2% on lower average selling prices.


The Activewear segment had an operating loss of $500,000 as compared to an operating loss of $1.8 million a year-ago, an improvement that was driven by improved manufacturing costs and lower raw material and transportation expenses.


Regarding outlook, management said fiscal 2010 should drive further expansion of revenue and improved profitability for the business. Delta expects total revenue to range from $360 million to $380 million and forecasts earnings per share to be between 80 cents and one dollar for the year.


Bob Humphreys, chairman and CEO, said in a conference call with analysts that the company anticipates further closings of retail apparel outlets, and added that the raw material and energy prices continue to be a challenge – which could further increase costs.


“Obviously,” said Humphreys, “there remains considerable risk in the apparel marketplace. While consumer demand has been solid for our products, this could weaken at any time.”