Boosted by an almost $20 million increase in sales, Delta Apparel Inc. reversed a year-ago loss in the first quarter.
For the three months ended Sept. 27, the Duluth, Ga.-based vendor reported net income of $674,000, or 8 cents a diluted share, versus a net loss of $1.5 million, or 18 cents a share, for the same period last year. Net sales jumped 26 percent to $91.4 million from $72.6 million.
Gross margins grew 320 basis points to 21.1 percent of sales, helped by increased prices in the activewear segment and a higher mix of retail-ready sales that the company said increased 36.6 percent to $41.4 million.
Inventory fell $1.1 million to $128.5 million, and debt was reduced $1.1 million to $128.5 million, partly because of strong fourth-quarter sales and lower capital spending.
“Demand for our portfolio of apparel products appears solid despite reduced retail open-to-buy dollars,” said president and chief executive officer Robert W. Humphreys. “In addition, we believe being recognized as a preferred supplier on certain retail programs has helped sales growth in our activewear business.”
The company said it has put in place new marketing strategies to drive organic growth. Delta said it will continue to focus on cutting costs in its manufacturing operations.
For fiscal 2009, Delta said it expected earnings per share of 70 to 90 cents on net sales of $340 million to $360 million.
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