Delta Apparel, Greenville, S.C., achieved net sales growth of 2.5 percent for its 2015 fiscal year and 12.7 percent for the fourth quarter, which ended Oct. 3, 2015. The numbers have been adjusted for prior year period sales in its recently divested The Game, a branded collegiate headwear and apparel business that it sold to David Peyser Sportswear Inc., the owner of MV Sport, Bay Shore, N.Y., in March.
“We sold The Game in a transaction that worked well for us and for the buyer,” Robert W. Humphreys, chairman and CEO for Delta Apparel, said. “We then focused on more strategic areas of our business that have the greatest potential for growth.”
On an unadjusted basis, net sales were $449.1 million in fiscal year 2015 compared with $452.9 million in the prior year, and up $120.2 million from $114.9 million in the prior year’s fourth quarter period. Operating profit for fiscal 2015 was $16.1 million compared to an operating loss of $1.7 million in the prior year, including a growth of $5.1 million, or 4.3 percent of sales, compared to a net loss of $765,000 in the 2014 fourth quarter. Net income was $8.1 million compared with a net loss of $960,000 in the prior year, and up $4.2 million in the fourth quarter.
“These improvements are supported by various initiatives during the year that have generated a growth trend we see continuing in fiscal 2016 despite persistent softness in the retail marketplace,” Humphreys said. “Simply put, we have transformed Delta Apparel into a company that can grow profitably even in difficult retail environments. We did this by making difficult choices and taking deliberate action as we exited fiscal 2014.”
Net sales in the company’s basics segment grew 21.1 percent in the fiscal 2015 fourth quarter to $74.4 million, which was led by increases in activewear sales, the catalog business and private label sales, as well as strong showings from new products, such as fleece, Delta-Dri and snow heathers.
After adjustment for the sale of The Game, net sales for the branded segment grew 1.4 percent percent during the fourth quarter of fiscal year 2015 compared to the prior year period. On an unadjusted basis, fourth quarter net sales were $45.8 million compared with $53.5 million in the prior year period, with all business units experiencing gross margin expansion. Salt Life increased net sales by 10 percent while Junk Food grew by 7 percent, but Soffe, which achieved solid growth in the independent sporting goods channel, had an 11 percent decrease in net sales for the quarter compared with the prior year period due to a decline with big-box sporting goods retailers. Soffe expects to launch a new business-to-business website in early calendar year 2016 to enhance growth opportunities in the independent sporting goods channel.
“Looking ahead, we believe there will be a continuation of the soft retail environment, but, regardless, we believe we are positioned to further improve our operating results in 2016,” Humphreys said. “Our fixed cost structure is now lower and we will have a full fiscal year to reap the anticipated benefits of the actions we took in the past year. We are excited about introducing new performance and lifestyle products across our business units for spring that we believe will enhance our current offerings to consumers. These steps give us encouragement that we should see another year of sales growth and profit improvement for Delta Apparel in fiscal year 2016.”
For more information, visit www.deltaapparelinc.com.
