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Category: Stock Market and Delta Apparel
Date: 4 February 2020 Stock Price: $24.30 We take a look at the 1st quarter of their 2020 fiscal year earnings report of Delta Apparel a designer, manufacturer and sourcing company that features a diverse portfolio of core activewear and lifestyle apparel products.
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About Delta Apparel
Delta Apparel, Inc., along with its operating subsidiaries, M. J. Soffe, LLC, Salt Life, LLC and DTG2Go, LLC, is an international design, marketing, manufacturing, and sourcing company that features a diverse portfolio of core activewear and lifestyle apparel products. The Company specializes in selling casual and athletic products across distribution tiers, including specialty stores, boutiques, department stores, mid-tier and mass chains, sporting goods and outdoor retailers, e-retailers and the U.S. military. The Company's products are made available direct-to-consumer on its websites at www.deltaapparel.com, www.coastapparel.com, www.saltlife.com and www.soffe.com. The Company's operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 8,000 people worldwide.
Overview of Delta Apparel's 1st quarter 2020 earnings report
The data below refers to the latest quarter unless specified otherwise:
- Net sales: $95.889 million (down from $101.675 million for the same quarter in the previous year)
- Net sales decreased by -5.7% over the last 12 months
- Cost of goods sold: $75.996 million (down from $83.105 million for the same quarter in the previous year)
- Cost of goods sold decreased by -8.6% over the last 12 months
- So bit of margin gain for Delta Apparel wit their net sales decreasing at a slower rate than cost of goods sold
- Net income: $923 thousand (up from a loss of -$1.149 million for the same quarter in the previous year)
- Diluted earnings per share: $0.13 (up from -$0.17 for the same quarter in the previous year)
- Diluted number of shares in issue: 7.072 million (up from 6.924 million for the same quarter of the previous year)
- Cash and equivalents: $433 thousand
- Cash and equivalents per share: $0.061
- Cash and equivalents makes up 0.25% of Delta Apparel's current market capital
- Cash and equivalents makes up 0.09% of Delta Apparel's total assets
- Trade and other receivables: $55.477 million
- Trade and receivables makes up 12.78% of Delta Apparel's total assets
- Inventories: $197.315 million
- Inventories makes up 45.4% of Delta Apparel's total assets
- Stockholders equity in Delta Apparel: $154.411 million
- Stockholders equity per share in Delta Apparel: $21.83
- Delta Apparel is trading at 1.11 times its stockholders equity per share which is outside the expected range of between 2 and 4 times that most firms tend to trade at
Delta Apparel's management commentary on their 1st quarter 2020 earnings
GREENVILLE, S.C., Feb. 03, 2020 (GLOBE NEWSWIRE) -- Delta Apparel, Inc. (NYSE American: DLA), a leading provider of core activewear and lifestyle apparel products, today announced financial results for its fiscal 2020 first quarter ended December 28, 2019.
Robert W. Humphreys, the Company’s Chairman and Chief Executive Officer, commented, “As we previously reported, our first quarter sales results were impacted by the shortened holiday calendar combined with an earlier shipping cut-off for in-hands holiday receipts. With that said, we are pleased to have delivered strong gross margin performance from our Delta Group segment that more than offset our sales performance during the quarter. We continue to drive efficiencies throughout our business while scaling our integrated vertical manufacturing platform and believe we are well-positioned to capitalize on the great growth opportunities that lie ahead for Delta Apparel.”
Robert W. Humphreys, the Company’s Chairman and Chief Executive Officer, commented, “As we previously reported, our first quarter sales results were impacted by the shortened holiday calendar combined with an earlier shipping cut-off for in-hands holiday receipts. With that said, we are pleased to have delivered strong gross margin performance from our Delta Group segment that more than offset our sales performance during the quarter. We continue to drive efficiencies throughout our business while scaling our integrated vertical manufacturing platform and believe we are well-positioned to capitalize on the great growth opportunities that lie ahead for Delta Apparel.”
During the quarter, the Company spent approximately $2.5 million on capital expenditures. The Company did not repurchase shares during the period, and approximately $9.5 million remains available under the Company’s authorized share repurchase program as of quarter-end. Total inventory at the end of first quarter fiscal 2020 increased to $197.3 million compared to $179.1 million at fiscal 2019 year-end, primarily driven from the seasonal build of inventory as well as broader product offerings within Activewear and Salt Life. Total debt, including capital lease financing, as of the end of first quarter fiscal 2020 was $147.4 million, up approximately 9% from the fiscal 2019 year-end due primarily to the seasonal higher working capital along with investments in distribution facilities.
Delta Apparel (NYSE American: DLA) stock price history
The image below, obtained from Google, shows the stock price history of Delta Apparel over the last 5 years. And its been a very good time for Delta Apparel stockholders The group's stock traded at around $8.60 a stock 5 years ago and is currently trading at $24.30 a stock. That's a significant return of 182.5% provided to Delta Apparel stockholders over the last 5 years.
Delta Apparel stock is trading at close to the midpoint between its 52 week high and 52 week low which to us is an indication that the short term sentiment and momentum of Delta Apparel stock is neutral at this point in time. However in recent weeks the stock has declined significantly from all time highs reached so in even shorter term basis the sentiment and momentum of Delta Apparel stock looks very negative.
Delta Apparel stock is trading at close to the midpoint between its 52 week high and 52 week low which to us is an indication that the short term sentiment and momentum of Delta Apparel stock is neutral at this point in time. However in recent weeks the stock has declined significantly from all time highs reached so in even shorter term basis the sentiment and momentum of Delta Apparel stock looks very negative.
Recent coverage of Delta Apparel
The extract below discusses the latest regarding Delta Apparel as obtained from Zacks.com
Delta Apparel came out with quarterly earnings of $0.13 per share, beating the Zacks Consensus Estimate of $0.07 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 85.71%. A quarter ago, it was expected that this maker of branded and private-label apparel would post earnings of $0.48 per share when it actually produced earnings of $0.50, delivering a surprise of 4.17%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times. Delta Apparel, which belongs to the Zacks Textile - Apparel industry, posted revenues of $95.89 million for the quarter ended December 2019, surpassing the Zacks Consensus Estimate by 0.90%. This compares to year-ago revenues of $101.68 million. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Delta Apparel shares have lost about 19.4% since the beginning of the year versus the S&P 500's decline of -0.2%.
Read the full article here
Delta Apparel came out with quarterly earnings of $0.13 per share, beating the Zacks Consensus Estimate of $0.07 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 85.71%. A quarter ago, it was expected that this maker of branded and private-label apparel would post earnings of $0.48 per share when it actually produced earnings of $0.50, delivering a surprise of 4.17%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times. Delta Apparel, which belongs to the Zacks Textile - Apparel industry, posted revenues of $95.89 million for the quarter ended December 2019, surpassing the Zacks Consensus Estimate by 0.90%. This compares to year-ago revenues of $101.68 million. The company has topped consensus revenue estimates just once over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Delta Apparel shares have lost about 19.4% since the beginning of the year versus the S&P 500's decline of -0.2%.
Read the full article here
Delta Apparel (NYSE American: DLA) latest stock valuation
So what do we value Delta Apparel stock at based on their latest earnings release? Based on Delta Apparel latest earnings report our valuation model provides a target price (full value price) for Delta Apparel stock at $27.80 a stock (down from our 4th quarter 2019 earnings report valuation of Delta Apparel). We therefore believe the stock of Delta Apparel is undervalued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $27.80. A good entry point into Delta Apparel would therefore be at $25 or below.
Since the stock of Delta Apparel is trading at below our suggested entry point we rate the stock of Delta Apparel as a buy
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price which in this case is $27.80. A good entry point into Delta Apparel would therefore be at $25 or below.
Since the stock of Delta Apparel is trading at below our suggested entry point we rate the stock of Delta Apparel as a buy
Next earnings release of Delta Apparel
It is expected that Delta Apparel will release their 2nd quarter 2020 earnings report in early May 2020