Delta Apparel Inc. anticipates overall net sales for its fiscal fourth-quarter ending October 3 to be approximately $116 million, up about 8 percent compared to $108 million in the prior-year period, with growth in each of its business units.
The Delta Group and Salt Life Group segments are expected to report fourth-quarter year-over-year net sales growth of approximately 8 percent and 12 percent, respectively. The company also expects to report an expansion of operating income in the fourth quarter compared to the prior year, exceeding its prior commitment to deliver fourth-quarter profitability on both a reported and adjusted basis.
Robert W. Humphreys, the company’s chairman and chief executive officer, commented, “In what has remained an unprecedented period for our nation and our industry, we are proud of the strong finish to our 2020 fiscal year. Our stellar preliminary fourth-quarter sales results were broad-based with growth in each of our business units. The advantages of the Delta Apparel strategic model with our diversified sales channels and broad geographic footprint, combined with our unique, integrated manufacturing platform, once again contributed to remarkable results this quarter and positions us well for profitable growth into the foreseeable future.”
Humphrey’s continued, “Our Activewear business increased sales by over 5 percent, as demand remained strong for our Delta Catalog products. We were particularly pleased with our team’s ability to ramp-up manufacturing quicker than we originally expected to service our private label customers and replenish our Catalog inventory levels, allowing growth in both of these channels within Activewear. Consumers continued to actively seek Salt Life and Soffe products across multiple distribution channels with notable sales growth on our Soffe and Salt Life web sites of over 80 percent and 30 percent, respectively. The Salt Life branded retail stores produced sales growth of over 120 percent from the prior year driven by same-store sales growth combined with new door openings.”
The company’s digital print business, DTG2Go, achieved net sales growth in the quarter of nearly 30 percent compared to the prior year, driven by unit growth of approximately 35 percent during the quarter. As previously announced, the company is expanding its DTG2Go digital print business with the opening of its first ‘On-Demand DC,’ a solution for retailers and brands to grow their business utilizing an integrated, on-demand fulfillment model.
Humphrey’s commented, “Our DTG2Go business continued to disrupt the industry with our unique on-demand model utilizing our proprietary technology and broad geographic footprint. Customers are seeing the benefits of the seamless supply chain of Delta garments within our on-demand model, with DTG2Go’s usage of Delta Catalog blanks jumping to a new record of approximately 40 percent utilization compared to 20 percent in last year’s fourth quarter and 30 percent during the June quarter. This trend is promising as it creates a more efficient operation, reduces garment costs for our customers, and lowers working capital needs in the business. We are transforming the on-demand, fulfillment model, and the new ‘On-Demand DC’ is validation that DTG2Go is at the forefront of revolutionizing the supply chain for the retail industry.”
Humphrey’s concluded, “I could not be prouder of the hard work and dedication of our employees in servicing our customers. All of their efforts to drive top-line growth and support our manufacturing initiatives are expected to pay off in terms of expanded profitability this quarter. We look forward to discussing our final fourth-quarter and full-year results in more detail on our upcoming earnings call.”
Final and complete financial results for the fiscal year 2020 fourth quarter ended October 3 will be released after the market close on November 19, 2020.
Photo courtesy Delta Apparel/Salt Live