Delta Apparel Inc. said second-quarter profits rose 64.6 percent, driven by robust organic growth and strength in its recently acquired headwear business.

This story first appeared in the January 27, 2010 issue of WWD. Subscribe Today.

For the three months ended Dec. 26, the Greenville, S.C.-based maker of casual and athletic apparel said net income grew to $979,000, or 11 cents a diluted share, from $595,000, or 7 cents, in the year-ago period.

Revenue in the second quarter gained 24.3 percent to $91.2 million from $73.4 million in 2008.

The retail segment, which includes the Soffe, Junkfood and To the Game businesses, reported a 41.3 percent increase in sales, to $45.8 million. The activewear division, comprised of Delta Catalog and FunTees, saw sales advanced 10.8 percent to $45.4 million. Delta said the sales expansion was driven by organic growth of 16.6 percent.

“Overall, we were very pleased with our second-quarter results, especially the strong sales growth by each of our business units,” chairman and chief executive officer Robert Humphreys said on Delta’s earnings call Tuesday. “In addition, we continue to reduce our manufacturing costs, which will drive improved results in the second half of this fiscal year.”

Lower manufacturing costs and more effective merchandising strategies helped the company improve its quarterly gross margin to 23.9 percent of sales, from 21.9 percent a year earlier.

For the first half, Delta’s profits almost tripled to $3.6 million, or 42 cents a diluted share, from $1.3 million, or 15 cents, in the comparable period in 2008. Sales for the period grew 15.5 percent to $190.3 million from $164.8 million.

Delta lifted its fiscal 2010 outlook to earnings per share of between 95 cents and $1.10 on sales in the range of $375 million to $385 million, up from EPS of between 80 cents and $1 on revenue in the range of $360 million to $380 million.

The company’s shares rose 26 cents, or 2.1 percent, Tuesday to close at $12.50, a 52-week high.

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