Delta Apparel posted record sales for the second quarter of 2010 as surging sales of its retail-ready segment, which consists of the Soffe, Junkfood and To The Game businesses, continued to boost it’s top line. Following up on a first quarter that saw the Greenville, SC-based company post revenue growth of 8.4%, Delta reported second quarter revenues were up 24.3% to $91.2 million. DLA net income was $1.0 million, or 11 cents per share, as compared to net income of $595,000, or 7 cents per share, in the year-ago period. Gross margins increased 200 basis points to 23.9% of sales from 21.9% last year.
DLA’s Retail-ready segment, which saw sales increase 41.3% to $45.8 million, was the primary driver for the second quarter. Excluding the headwear business, sales grew organically by 23.9%, driven by new licensing agreements with the NFL and Disney. Sales at Junkfood increased 54.9%. At Soffe, sales increased 4.2%, with the company reporting revenue growth in all segments except military, which anniversaried against a year-ago Q2 that included the revenue of the initial rollout of the Army’s PT uniform. Gross margins in the Retail-Ready segment increased 340 basis points compared to the prior year.
The Activewear segment, comprised of the Delta catalog and FunTees businesses, had sales of $45.4 million for the quarter, an increase of 10.8% compared to the prior year’s first quarter. Management said Delta catalog sales increased 16.3%, driven by a 22.7% increase in units sold compared to an overall t-shirt market that fell more than 10%. ASPs in the Activewear segment declined 5.2%. Gross margins in the Activewear unit improved 330 basis points.
Regarding outlook, Delta raised its expectations of net sales and earnings, with net sales expected to be in the range of $375 million to $385 million and earnings to be in the range of 95 cents to $1.10 per diluted share.
