Delta Apparel Announces Preliminary Third Quarter Results - Seite 2

During the third quarter, direct-to-consumer sales significantly increased for the Company, including e-commerce sales that more than doubled compared to prior year, led by sales growth of over 140% on the Salt Life ecommerce site and 80% on the Soffe consumer site.

Mr. Humphreys commented, “We have really enjoyed connecting directly with our loyal Salt Life and Soffe consumers through social media channels and on our e-commerce sites, as well as in our retail stores which have all now safely reopened. It is also promising to see net sales for the Salt Life Group return to mid-single digit growth in the month of June, as our retail partners started to re-open their doors in the back half of the quarter.”

“The third quarter was unprecedented for our nation, our industry, and our Company,” Mr. Humphreys continued. “I am so very proud of our teams across all our businesses for their unwavering dedication throughout the pandemic, and of the significant progress we have collectively made to service our diverse customer base.  While our non-U.S. manufacturing operations were closed for most of the quarter, we are encouraged that by the end of June we had resumed production at all of our manufacturing plants.  In accordance with local regulations, we have implemented strict safety protocols and will operate at a reduced capacity in the near term for the safety of our employees and to align our production levels with anticipated future business.”

The Company expects to record approximately $24 million of non-recurring expense during its fiscal 2020 third quarter associated with impacts from the COVID-19 pandemic.  These include costs related to the curtailment of its manufacturing operations and increased reserves related to the heightened risks in the market as the U.S. continues its recovery.   

Mr. Humphreys concluded, “We look forward to providing a more comprehensive review of our third quarter results during our earnings call on Thursday, July 30, 2020.  Our business is recovering much quicker than we originally anticipated, and we believe this momentum will continue, allowing us to return to profitability in our September quarter.  Each month our liquidity has continued to improve, resulting in a nearly 50% increase in our cash on hand and availability under our credit facility at June compared to the March levels.  I remain confident Delta Apparel is in a solid financial position to emerge from this pandemic stronger, and we are ready to profitably grow our business.”