Supplier firm Delta Apparel (asi/49172) announced that net sales increased 2.5% in its fiscal first quarter of 2016, which ended January 2. The figure is adjusted to remove sales in the prior year’s quarter that were attributed to the company’s “The Game” business, which was sold in March of 2015 to MV Sport (asi/68318).
First-quarter net sales were $90.2 million compared to $93.4 million in the prior year’s first quarter, before making the sales adjustment. The company’s operating profit for Q1 increased $5.4 million from a $3.2 million loss in the comparable 2015 period. And, net income was $681,000 compared with a net loss of $4.2 million in 2015’s first quarter.
“Given all of the hard work our team has put in to implement our strategy of making Delta a more nimble and responsive company, our ability to operate profitably during the first quarter should come as no surprise,” said Robert W. Humphreys, Delta’s chairman and chief executive officer.
Delta also reported that net sales in its basics segment grew 6.7% to $61.5 million, from $57.7 million in the prior year’s first quarter. Activewear sales increased by 6%, driven by a 7% jump in catalog sales. The company said that fashion basics, including fleece, snow heather, and softspun programs, as well as solid increases in “full package” programs, drove catalog growth during the quarter.
“We have transformed our Activewear business with new garments and fabrications to make it more responsive to current fashion trends,” Humphreys said. “Additional products and colors have been introduced for spring delivery.”
Delta’s private label business experienced 5% growth in the 2016 first quarter, primarily driven by new customers, including large, international brands as well as trendy, regional brands, acquired during 2015.
Humphreys also added that Delta’s manufacturing operations in Honduras are scheduled to begin production in February.
“We expect this initiative to yield annual savings of $2 million, with approximately one quarter of this included in our fiscal year 2016 results,” Humphreys said. “Our continuing cost controls in both manufacturing and administrative functions should add further strength to our bottom line.”