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Category: Stock Market and Delta Apparel
Date: 4 December 2019 Stock Price: $27.80 We take a look at the 4th quarter of their 2019 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 4th quarter 2019 earnings report
The data below refers to the latest quarter unless specified otherwise:
- Net sales: $107.957 million (up from $92.922 million for the same quarter in the previous year)
- Net sales increased by 16.8% over the last 12 months
- Cost of goods sold: $85.073 million (up from $73.769 million for the same quarter in the previous year)
- Cost of goods sold increased by 15.3% over the last 12 months
- Net income: $3.523 million (up from $3.107 million for the same quarter in the previous year)
- Diluted earnings per share: $0.50 (up from $0.43 for the same quarter in the previous year)
- Diluted number of shares in issue: 7.089 million (up from 7.304 million for the same quarter of the previous year)
- Cash and equivalents: $605 thousand
- Cash and equivalents per share: $0.09
- Cash and equivalents makes up 0.31% of Delta Apparel's current market capital
- Cash and equivalents makes up 0.16% of Delta Apparel's total assets
- Trade and other receivables: $60.887 million
- Trade and receivables makes up 16.1% of Delta Apparel's total assets
- Inventories: $179.107 million
- Inventories makes up 47.3% of Delta Apparel's total assets
- Stockholders equity in Delta Apparel: $153.888 million
- Stockholders equity per share in Delta Apparel: $21.70
- Delta Apparel is trading at 1.28 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 4th quarter 2019 earnings
GREENVILLE, S.C., Nov. 21, 2019 (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 2019 fourth quarter and full year ended September 28, 2019.
Robert W. Humphreys, the Company’s Chairman and Chief Executive Officer, commented, “We are thrilled with our overall performance for the fourth quarter and full year. Both our Delta Group and Salt Life Group segments achieved double-digit sales growth for the quarter and drove results exceeding our expectations. We were also able to expand gross margins in the back half of the year, maintain our cost discipline, and finish the year with increasing profitability.” Mr. Humphreys continued, “As we look ahead to fiscal 2020, we are excited to see positive momentum across our business segments. In our Delta Group, we continue to diversify our customer base across multiple channels of distribution, and our Activewear business’s entry into the full-service distributor channel in 2020 should only enhance our versatility. Our DTG2Go business turned in another extremely strong year, more than doubling its revenue, and we continue to be in a prime position to capitalize on what we see as the still largely untapped growth potential of digital printing. Our Salt Life lifestyle brand also enters the new year with good things happening in a variety of areas, and we remain very focused on expanding the brand’s direct-to-consumer strategies and partnerships with national and regional retailers.”
Robert W. Humphreys, the Company’s Chairman and Chief Executive Officer, commented, “We are thrilled with our overall performance for the fourth quarter and full year. Both our Delta Group and Salt Life Group segments achieved double-digit sales growth for the quarter and drove results exceeding our expectations. We were also able to expand gross margins in the back half of the year, maintain our cost discipline, and finish the year with increasing profitability.” Mr. Humphreys continued, “As we look ahead to fiscal 2020, we are excited to see positive momentum across our business segments. In our Delta Group, we continue to diversify our customer base across multiple channels of distribution, and our Activewear business’s entry into the full-service distributor channel in 2020 should only enhance our versatility. Our DTG2Go business turned in another extremely strong year, more than doubling its revenue, and we continue to be in a prime position to capitalize on what we see as the still largely untapped growth potential of digital printing. Our Salt Life lifestyle brand also enters the new year with good things happening in a variety of areas, and we remain very focused on expanding the brand’s direct-to-consumer strategies and partnerships with national and regional retailers.”
During the year, the Company spent approximately $16.2 million on capital expenditures and $2.7 million to repurchase 141,501 shares of its stock. Total debt, including capital lease financing, as of the end of fiscal year 2019 was $135.1 million, up about 20% from the end of the prior year due principally to the Company’s recent digital print acquisitions and distribution expansions. Total inventory at the end of fiscal year 2019 was $179.1 million compared with $175.0 million a year ago due primarily to recent product expansions in both the Delta Group and Salt Life Group segments.
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 $10.44 a stock 5 years ago and is currently trading at $27.80 a stock. That's a significant return of 166.2% provided to Delta Apparel stockholders over the last 5 years.
Delta Apparel stock is trading at a lot closer to its 52 week high of $28.92 than it is to its 52 week low of $16.11 which to us is a clear indication that the short term momentum and sentiment of Delta Apparels stock is very positive
Delta Apparel stock is trading at a lot closer to its 52 week high of $28.92 than it is to its 52 week low of $16.11 which to us is a clear indication that the short term momentum and sentiment of Delta Apparels stock is very positive
Recent coverage of Delta Apparel
The extract below discusses the latest regarding Delta Apparel as obtained from Zacks.com
Delta Apparel (DLA - Free Report) came out with quarterly earnings of $0.50 per share, beating the Zacks Consensus Estimate of $0.48 per share. This compares to earnings of $0.43 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 4.17%. A quarter ago, it was expected that this maker of branded and private-label apparel would post earnings of $0.63 per share when it actually produced earnings of $0.70, delivering a surprise of 11.11%.
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 $107.96 million for the quarter ended September 2019, missing the Zacks Consensus Estimate by 0.15%. This compares to year-ago revenues of $92.92 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 added about 54.1% since the beginning of the year versus the S&P 500's gain of 24%.
Read the full article here
Delta Apparel (DLA - Free Report) came out with quarterly earnings of $0.50 per share, beating the Zacks Consensus Estimate of $0.48 per share. This compares to earnings of $0.43 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 4.17%. A quarter ago, it was expected that this maker of branded and private-label apparel would post earnings of $0.63 per share when it actually produced earnings of $0.70, delivering a surprise of 11.11%.
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 $107.96 million for the quarter ended September 2019, missing the Zacks Consensus Estimate by 0.15%. This compares to year-ago revenues of $92.92 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 added about 54.1% since the beginning of the year versus the S&P 500's gain of 24%.
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 $31.70 a stock. 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 $31.70. A good entry point into Delta Apparel would therefore be at $28.50 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 $31.70. A good entry point into Delta Apparel would therefore be at $28.50 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 1st quarter 2020 earnings report in late February 2020