Gross margins were significantly lower at 13.0 per cent, compared to 22.4 per cent in the prior year. Selling, general, and administrative expenses saw a reduction from $79.5 million to $73.7 million. However, this was overshadowed by an increase in selling, general, and administrative expenses as a percentage of sales, rising from 16.4 per cent to 17.8 per cent, the company said in a press release.

The company experienced a substantial shift in operating income, going from $31.8 million or 6.6 per cent of sales to an operating loss of $29.4 million, which is 7.1 per cent of sales. Net income also saw a drastic change, plunging from a profit of $19.7 million, or $2.80 per diluted share, to a loss of $33.2 million, or $4.75 per share.

“Fiscal 2023 was undoubtedly a challenging year for our company and the industry given the reduced demand environment following last year’s post-pandemic seller’s market. However, it was also a transformative year for our company where we implemented a number of needle-moving initiatives across our business that set the stage for significant operational improvement,” said Robert W Humphreys, Delta Apparel’s chairman and chief executive officer.

In the fourth quarter (Q4) of FY23, net sales were $91.4 million, a decline from the $115.5 million recorded in the same quarter of the previous year. The Salt Life Group's net sales were $12.5 million, down from $14 million, while the Delta Group segment's sales dropped from $101.5 million to $78.9 million.

Gross margins for the quarter stood at 11.2 per cent, a decrease from 18.7 per cent in the prior year's fourth quarter. The Salt Life Group segment maintained steady gross margins of 51.7 per cent.

Selling, general, and administrative expenses in Q4 FY23 were reduced to $17.1 million from the previous year's $19.8 million, but as a percentage of sales, they increased to 18.7 per cent.

The company reported an operating loss of $17 million or 18.6 per cent of sales in Q4 FY23, a significant fall from an operating income of $2.2 million or 1.9 per cent of sales in the prior year. The Salt Life Group segment also experienced an operating loss of $400 thousand compared to operating income of $1.2 million in the prior year period.

Net income for the quarter was a loss of $16.4 million, or $2.34 per share, compared to a loss of $281 thousand, or $0.04 per share, in the prior year.

As of September 30, 2023, net inventory was $212.4 million, marking an 18 per cent decrease from December 2022 and a year-over-year decrease from $248.5 million in September 2022.

Fibre2Fashion News Desk (DP)