Delta Apparel Inc. reported that sales growth for the fiscal second quarter ended December 27 was fueled by gains at the Retail-Ready division, which is comprised of the Soffe and Junkfood businesses, while the Activewear segment, comprised of the Delta and FunTees businesses, came in just below flat for the period.  The company did manage to swing to a profit for the quarter, as well.


The Junkfood business had its seventh consecutive quarter of double-digit sales growth, increasing its sales in the second quarter by 43.5%. Junkfood is driving growth through its new licenses, including Dr. Seuss and NFL, and continued success with its co-branded products with GapKids and babyGap. The Activewear division reported sales of $41.0 million, roughly flat to the prior year second quarter.


For the fiscal year ending June 27, 2009, the company reiterated its expectations for net sales to be in the range of $340 million to $360 million and earnings to be in the range of 70 cents to 90 cents per diluted share. This compares to fiscal year 2008 sales of $322.0 million and a loss of 6 cents per diluted share, inclusive of 39 cents of costs associated with the company’s textile restructuring plan.


This restructuring plan involves closing the company's textile manufacturing facility in Fayetteville, NC.  With this closure, DLA is consolidating the textile production for its M. J. Soffe business, currently produced in the Fayetteville facility, into its operations in Maiden, NC and its Ceiba Textiles facility in Honduras.  The movement of textiles out of the Fayetteville facility will impact the employment of 107 associates.


The movement of production will begin in the company’s third fiscal quarter and is scheduled to be complete in June 2009. The cost of this transition is not expected to be material. The closing of the Fayetteville Plant is expected to save the company approximately $1 million annually once the transition of the fabric production is complete. The company anticipates this favorable financial impact will be realized in its results of operations in the second half of fiscal 2010.