Delta Apparel Inc. reported that after adjusting for the impact of the manufacturing realignment, earnings per diluted share in the fourth quarter ended October 1 are expected to be in the range of 38 cents to 40 cents, compared with 53 cents per share in the prior-year quarter.
Operating margins were on par with the previous year; however, the lack of an extra week of sales, coupled with the unfavorable impact of tax expense in this year’s quarter compared to a tax benefit in the prior-year period, lowered diluted earnings by approximately 15 cents per share.
All of the company’s businesses, with the exception of Junkfood, experienced sales growth during the quarter, with overall gross margins continuing to expand in both the basics and branded segments. The prior-year fourth quarter included 14 weeks of sales due to falling within a 53-week fiscal year, while the current-year fourth quarter included 13 weeks. Sales for the 13-week fiscal 2016 fourth quarter were $114.4 million, compared to $120.2 million in the prior year 14-week fourth quarter. Adjusting for the additional week in the prior year, net sales in the fiscal 2016 fourth quarter exceeded those in the comparable 2015 period by 2.5 percent.
The company completed its manufacturing realignment during the quarter as planned, and at a slightly lower cost than originally expected.
Robert W. Humphreys, Delta Apparel Inc.’s chairman and CEO, commented, “We’ve had a very exciting, busy and productive quarter that, as you will see in our full results, gave us a solid finish to our fiscal year 2016. We saw double-digit sales growth in our Salt Life and Art Gun businesses, and mid-single-digit sales growth in our Activewear business. Soffe experienced solid growth for the quarter as well. We fully implemented our manufacturing realignment during the quarter at a cost that was about 1 cent per share less than anticipated. We are very pleased that we were able to complete the sale of the real estate and equipment associated with our Maiden, NC textile facility. New equipment is installed and running at our Honduran textile facility and we are rapidly approaching our output goals. Our activities throughout fiscal 2016, and particularly in our fourth quarter, give us good momentum and a strong foundation for growth and profitability in fiscal 2017.”
The company will report its full fourth-quarter and fiscal-year-end results on November 29, 2016, before the market opens.
Delta Apparel Inc., along with its operating subsidiaries M. J. Soffe LLC, Junkfood Clothing Company, Salt Life LLC and Art Gun LLC, is an international design, marketing, manufacturing and sourcing company that features a diverse portfolio of lifestyle basic and branded activewear apparel, headwear and related accessories.
