The following is a summary of the Delta Apparel, Inc. (DLA) Q1 2024 Earnings Call Transcript:
Financial Performance:
Delta Apparel reported Q1 2024 net sales of $79.9 million, a drop from $107.3 million the previous year.
Gross margins dipped to 10.9% from 12.7% in last year's same quarter due to production curtailment.
Selling, general, and administrative expenses marginally decreased from $18.9 million to $18.6 million.
Faced an escalated operating loss of $4.9 million from the previous year's $2.6 million.
Net interest expense rose to $3.6 million, up from $2.9 million primarily due to increased interest rates.
Q1 saw a net loss of $6.6 million or $0.94 per share.
Year-over-year debt reduced by 22% resulting in total net debt of $144.4 million, which was $185.2 million in 2022.
Business Progress:
Despite market challenges, Salt Life Group sustained growth in its net sales.
Measured cost optimization led to debt reduction and inventory reductions of 24% compared to the prior year.
Streamlining operations, Delta exited Mexico and closed an inefficient print facility in Clearwater, Florida; a move also led to a 20% workforce reduction.
Delta is finalizing discussions regarding the sale of the Fayetteville campus and Salt Life business.
The company has added a new store in Virginia, further expanding the Salt Life retail footprint now encompassing 28 stores.
DTG2Go showed improvement with better quality performance, timely delivery, and labor efficiency rates.
The company faced a dip in gross margins due to production cutbacks and the timing of inventory receipts.
More details: Delta Apparel IR
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