Delta Apparel, Inc. reported preliminary fiscal second-quarter results before the market opened on Thursday.
The earnings per diluted share are expected to be in the range of 40 to 43 cents. The consensus was for 33 cents a share. This compares to last year’s 3 cents a share for the same period, after adjusting for the 43 cent per share gain on the sale of The Game business. Delta completed the sale of The Game branded apparel in March 2015.
Net sales are expected to come in at $109.2 million, lower than last year’s $109.6 million and missing the estimated $110 million. Delta said the net sales were impacted by the bankruptcy of a large retail customer. Since Delta makes activewear, they are probably referring to the bankruptcy of The Sports Authority.
“We are pleased with the performance of the business in the first half of this fiscal year, with expected earnings of $0.49 to $0.52 per share compared to a loss of $0.50 in the prior year first half.” said chief executive officer Robert Humphreys. “We saw strong second-quarter sales growth in areas of key focus for us, including Salt Life, e-commerce, fashion basics, and catalog full-package programs. Gross margins expanded in both our branded and basics segments, and our manufacturing expansion initiative, which gives us more flexibility in the products we can internally produce, is progressing as planned.
The company did not give gross margin figures, but did say that overall gross margins expanded due to growth in the company’s higher margin businesses.
Delta will report its full second-quarter results on May 12. The stock fell slightly by 5 cents to $20.25 in early trading. Overall, the stock has risen 65 percent for the past year.
Delta is the maker of Junkfood Clothing, Salt Life and Art Gun brands.