Delta Apparel, Inc. expects a loss in the range of 5 cents to 7 cents a share in its third quarter – including a 7 cents a share restructuring charge – on revenue of approximately $75 million.


That guidance compares with prior expectations of revenues between $84 million to $88 million and earnings per share between 25 cents and 29 cents.


Although sales in the retail-ready segment increased from the prior year, they missed original revenue targets due primarily to the overall slowdown of consumer demand for apparel. As a result of the high margin contribution from this segment, the modest sales shortfall to expectations disproportionately reduced the company’s Q3 profitability.

 

At the same time, sales in the activewear segment were lower than the prior year and were also below expectations for both the catalog and private label channels due to weakness in consumer spending. In addition, higher energy, transportation and raw material costs are creating a difficult marketplace for undecorated tees.


“While the sell-through of our Soffe product line remains solid across its channels of distribution, several retailers have been more conservative with their level of reorders compared with previous seasons due to the overall softness in consumer spending,” said Robert Humphreys, president and CEO.


For fiscal 2008, revenues are now expected to range from $305 million to $315 million with loss per share from 16 cents to 10 cents, inclusive of approximately 39 cents in restructuring related charges.