NEW YORK — Continued sluggishness at retail reverberated up the supply chain to push Delta Woodside Industries Inc. to a first-quarter loss.

For the three months ended Sept. 27, the Greenville, S.C.-based textile company recorded a net loss of $3.1 million, or 53 cents a diluted share. By comparison, last year the firm posted earnings of $1.4 million, or 24 cents.

Sales for the quarter fell 7.8 percent to $42.6 million from $46.2 million last year, and cost of goods sold shot up more than 1,000 basis points to 98.5 percent of sales. Delta Woodside swung to an operating loss of $1.9 million from an operating profit of $1.4 million.

The operating loss was principally the result of unabsorbed manufacturing costs associated with reduced running schedules brought on by lower customer demand, the firm said. Increased employee benefit costs also contributed to the loss.

“The order flow on our books did not happen as planned due to unexpectedly slow retail late in the first quarter,” added chief executive officer W.F. Garrett in a statement. “Slow retail continued early in the second quarter, but recently, retail has improved and inventories throughout the supply chain should be corrected.”

As reported, last month the operating loss caused the firm’s subsidiary, Delta Mills Inc., to fall out of compliance with the financial covenants of its $50 million revolving credit agreement with GMAC. Delta Mills has since obtained a waiver of compliance from GMAC and is currently in discussions with the lender regarding amending the covenants or extending the waiver.

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