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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