DLA - Earnings call transcript Q3 2021

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Operator

Please stand by. Thank you and good afternoon for everyone participating in Delta Apparel’s Fiscal 2021 Third Quarter Earnings Call.

Joining us from management are Bob Humphreys, Chairman and Chief Executive Officer; Deb Merrill, Chief Financial Officer and President of the Delta Group.

Before we begin, I’d like to remind everyone that during the course of this conference call, projections or other forward-looking statements may be made by Delta Apparel’s executives. Such projections and statements suggest prediction and involve risks and uncertainty, and actual results may differ materially. periodic the with XX-K company’s XX-Q today. the Exchange Securities and to filed including Commission, most refer reports the filed and Form Please recent Form to factors projections the forward-looking statements. cause This contained or that identifies from those important actual document results differ materially in could that Please any any it commit not to are or revise forward-looking projected made today if as of any does note except the as not apparent company statements, will that forward-looking becomes even and required statements be only by results law, update realized.

will As today’s to is reminder, Executive I a And and would Chairman turn call Officer, over -- call being Humphreys. the recorded. Bob Chief now Delta’s

Bob Humphreys

Good for fiscal us afternoon. third our thank on joining you quarter And XXXX earnings call.

our release to dedication, very press our our all we As to teams we per have throughout earnings adaptability and of for teams thank their in technology as demonstrated us into pleased and this have the have and with record new and streamlined flexibility our I led hard you pleased which our the integrate diluted particularly am EPS continued continue successfully share. of organization with has for shareholders, $X.XX our are delivered innovative I our to year. afternoon, performance want to business. saw strong work

revenue overcame Our topline margins. including double-digit and labor solid inventory many delivered operating challenges, shortages, teams constraints and and U.S.

for strategies our platform. companies regional full as package looking chain with the and retailers we outdoors. active near-shore onshore pandemic disruptions more well Add that wear the Western apparel supply tariff Over Global the has and brands, chain supply Hemisphere athletic before. ever towards provide was home the last most several trade accentuated and trend and result international recent from this people are are as and from can favorable more trends years, athleisure. uncertainties, policies been the than only In consumer to seeking to as working with have along enjoying the sourcing recent manufacturing

to the producing flexibility capacity. Over our to capabilities continued platform ever manufacturing more increase the we are our manufacturing recently, our than product years, XX of before. we expand past have And most invest in and

As market expect demand made outpacing be new to online production further already capacity commitments investment we the production capacity, have we increase trends XXXX. this half fiscal back in with see and to of the

the foundation Our and benefits achieve have with with products our growth in well the vertical can channels highlights of strong distribution, broad and we we going performance initiatives, the offer, coupled our performance in services ongoing operating of place, the positions during the market integration as in our strategic operations. forward. believe quarter efficiencies We for the we continued strong the demand unique margin for

business I’ll our to questions. quarter Let the will to Deb highlights call me then now turn review we Merrill Deb? when the and open third financial rejoin results. who over call up

Deb Merrill

To Bob. position the long-term the proud you, are echo third strides Bob’s within great certainly as Thank we made business comments, success. results and of very to for have quarter well our we

compared XX% growth when the quarter to operations the For the significantly by year, pandemic. of were third we delivered our disrupted prior COVID-XX

faced June and believe labor and despite we quarter compared we were March this relatively that is to compared XXXX, our the the to supply chain However, sales the year. grew more X% it same flat in meaningful challenges quarter have fiscal

Delta realization. initiatives extraordinary of moving quarter share. earnings was to by with fronts coming Apparel, $X.XX, multiyear driven representing earnings of in spending XX% direct-to-consumer growth Salt continued controls. XXX% on Profitability of same growth our and all it quarter XX% quarter with and the compared XXXX, This diluted $X.XX the fiscal expanded, greatly sales an over in has channels. expectations reflects sales strategies, share We many across in June for per XXXX exceeded EPS deliver efficiencies Our compared culmination our business year to Lake current our over quarter strategic our per to with our margin a growth manufacturing record importantly

fiscal segment integrated operating Group solutions. streamlined We a a organization powered with fulfillment XXXX, business our a entering Activewear digital are Delta fully DTGXGo by as

and In Delta and our business business. purchase as them channels, Delta source of Activewear formerly resort earlier Catalog directly now and or branded key range our FunTees and the Private in a of business. products printers Direct and strong Our channel mid-tier Direct year. our well promotional, our our broad dealers. also is operating Delta Delta screen the Global at regional discussed cater Customers quarter, where as our our organized retail specialty mass business, we channel, and Direct, portfolio servicing licensing this team driving Direct, our with Platinum, as distribution around as customer Soffe channels, Label retailers, customers formerly Delta, Direct spanning can in June and from Delta Brands seeking Retail sales to are e-retailers services

As $XX about which season quarter the or a entered prior constrained ability strong our XX% quarter to our demand strongest market. the with million Direct. the June inventory on reminder, less is typically We year, we Delta saw our service seasonally in the for than

our our results. inventory, only even quarter However, were with June results below less XXXX sales XX% slightly

ultimately, future near-term to in needs, our Although, we working are this inventory serve our at-once opportunities. diligently inventory constrained the remain levels we rebuild and customers in business, for

at output an discussed As we have in done to previous our production job teams produce calls, manufacturing and continue platform. increasing levels on within amazing manufacturing record our

us also to our flexibility capabilities increase our production more As we but manufacturing expand of operation, we’re we supply their products innovative planning to fiscal majority progress XXXX, custom the customers. to value-added Brands allowing and offer through additional to further with Global products branded partner investments Brands to of from Retail capital being business with the Direct Global of our our provide products, garments further In chain services. of sold to shipment capacity, development

deliver to of stores compared a and the channels. our business are the fiscal directly Global growth Soffe in Brands retail Direct in business organizational the record track June our e-commerce the by which as led in XXXX centric to on into refreshed and office network, all-time their This distribution inventory includes support pre-pandemic streamlined strength Soffe team, to serve of business through global more support more manufacturing Delta, portfolio has also Activewear proactive products Platinum The and integration planning sales sales We XXXX. structure, is by providing of function. and Retail this sales quarter to demonstrated a our back and customer and a and retailers Delta

this one-time diluted per was $X.XX While we quarter, in beginning the we to integration incurred range share which incurred diluted $X.XX $X.XX in anticipate of this annual approximately to cost per in of from this of XXXX. share per share initiatives facilitate fiscal the $X.XX integration year June benefits

digital market, Our market years. in the which network expand to fulfillment is and in chain, broad believe Digital for considering integrated and Print technology, We coming fulfillment broad supply proprietary our and competitive a relationships. poised rapidly we diverse business, the customer print force this vertically geographic DTGXGo remains in and differentiated are distribution,

and digital customers whom to on the see We continue are fulfillment of to demand to retailers current move an Group brands, of Delta many model. interest

in traditional of the over In channel prior quarter XX% compared fact, retail saw DTGXGo June the growth the year. to in

quarter reduces This As vertically Delta printed garment. digitally we significantly orders the fulfilled a resulting strong costs in of XX% orders integrated for to customers. our apparel a of at supplier, the of on testament in above and to being a customers DTGXGo the strategic the DTGXGo units Delta a X% is fiscal utilizing advantage labor XX% blank operation, XXXX. compared quarter board as of in garment June a new XX% utilization started experienced with efficient March in production ahead customers quarter coming creates more working This fulfillment temporary to trend a platform capital the received, year disruptions surge as promising the produced increased prior the from XXXX in result needs third of to it shortages existing meet Delta lowers and quarter. decrease this and the the We is business.

anticipate better additional during of we in the implementation labor programs quarter, demand service balance production to we see a market. the pay of the Following the incentive

technology customers. also our streamline to better and continue process, efficiencies more increase tools add serve to fulfillment We the

With a these add, about we to XX% we ago. than additional the to anticipate year service more able orders plan being equipment tools and

Life’s stores certain such quarter, reduce is June strength more Salt Life, to destinations. performance, in open even positive Turning omnichannel great having approximately we locations of strength, in channels. to store XXXX one-third sales With at our with Salt least retail our grew which each to Life making Carolina, labor two-thirds sales, towards are the of be our channels. considering impressive soon to total our true retail Beach, continue sales momentum the in near be Galveston. stores from over compared XXX% opening enthusiasts our direct-to-consumer doors and will topline XX% grew compared Myrtle make particular of Showing hours vacation our double-digit first we because are well for key Life in brand. in Salt new Texas, contributions as of as to Salt over branded quarter, actively retail the Sales engage This with goal South progress e-commerce with at now shortages. will up the Direct-to-consumer our wholesale, growth June XXXX

locations open our of accelerating five plans at We’re now during Salt the new were all retail actively Life quarter. retail be our channels with XXXX. in also Salt excited online engaged to initiatives, through brand strategic with the enthusiasts Life least to

the for capabilities members best who followers. also social with athletes, and XX% marketing media Life have Lake Life live not Salt as lengths our the while We day. experiences our viewership. surfing the channel authentic on just content but produce who XX%, for of about quarter we team, of our We are growing watched of the for million new have this our every year, Salt quarter, X.X internal team compared fishing, harnessed of video March diving content increased to increasing some extended strong our YouTube minutes Salt truly the June Viewership the

website, quarter content our XXXX. drive since XX% Daily helped a have and content fiscal e-commerce as publications, of podcast launch and well June weekly frequency the ecosystem March Salt publication sales over in to as above social, we of web the Following the increased of This the email Salt compared in launched engaging online on below. Life

review our detailed more a of through go results. third financial quarter I’ll Now

June million, of third XXXX fiscal fiscal our $XXX.X to compared quarter, an delivered XXXX. sales XX% we increase For of our quarter of

net focus XX.X% for the sales, XXXX in increase compared costs Given in increases advance of fiscal business XX.X% were XXXX. in on the -- fiscal the June quarter expectations. in primarily decline was the million group, compared net Group, quarter, in Salt quarter mix for in from $XX.X -- the sales, June X% or flat compared XX% XX% expenses compared $X.X exceeding sales by partially relates of $XX.X higher incentive of sales. SG&A offset in million of and XX% and general June I’ll our particularly results quarter profitability. the XXXX, June sales the of sales by of to higher cost quarter. driven X% of of our $XX.X XX% in sales or to third driven the to internal in on which income million, with expense million was quarter XX.X% The pay a benefit XXXX Gross higher Salt stronger third third Lake XXXX compared were XXXX in direct-to-consumer of Gross to segments product of through $XX.X sales the in was discussion relatively increased COVID-XX fiscal the to in prices Life XXXX. in million sales both to increased the Operating which of a flowing sales. versus basis margin to Selling, XXX XX.X% points administrative of XXXX, profit quarter impact or by to the million the $XX.X or Delta a increase increase selling consistent with period the fiscal

of reduction The XXXX acquisition. of third the the contingent DTGXGo related million fiscal the included $X.X value from amount earned of fair liability out quarter results to

quarter $X.XX the to a settlement the included of fiscal $X.X to share per million third increase million income was diluted million diluted third The fiscal for XXXX gain $X.X third fiscal of compared or to EPS Adjusted XX%, a results or of commercial $X.XX $X.X litigation quarter was third the quarter related Net of share, per for compared share the in $X.XX, quarter the XXXX quarter per in of an earnings adjusted XXXX. XXXX. of matter. the $X.XX

down total $X.X million of inventory June million with and sheet a from strong, XXXX, March $X.X ago million of up remains as Our balance $XXX.X from XXXX. year

we our build levels the are all-time demand at for noted, to manufacturing market inventory the record service previously to As products.

$XX We June capital more constraints, several of XXXX, in levels continue cash reach net with capital debt less we third of fiscal net was million. debt year a million on $X.X $XXX.X $X.X and improving XXXX ago see approximately during fiscal production, and inventory March increased with representing expect position XXXX as $X.X by debt expenditures spent in expenditures million that the and have million increase how in financing to expect hand over about of inventory to from we last levels a quarter the XXXX. Total operate With million XXXX. a quarters net levels With total capital to efficiently to decrease the lease be and spring our each and our learned said, inventory. new including normalized quarter our on

our to was week reminder, fiscal After XX the had weeks anticipate be available XXXX our for an of for additional a demand as XXXX prior adjusting products quarter prior to year. September as will meet year week inventory these we September quarter Looking year We not quarter, of a mid-single our higher, additional digits. much to sales, see but demands. believe will September growth be would the

product prior sales. in have costs September will higher calls, through of mentioned cost As quarter our flowing

to-date and up in for and company recent While beyond. strategies, we that -- put the to profitability be our quarter. open and continue very to despite to call more margins compared this that gross now pleased on performance we that glad well-positioned fiscal we March the for And with should macro summary, questions. margins believe our enhancing allow remain with and we’re ongoing headwinds, of will In strong to believe can approximate being we’ll pressure a any our operating XXXX our efficient coupled margin be improved XXXX growth quarter,

Operator

a Telsey go We’ll you. take question from with ahead. Thank Dana Telsey Instructions] [Operator Group. Please

Dana Telsey

the Hi. see And Good nice When similar the I September sizing itself, March to in it it make unpack like to the that Life. Group demand. so little inventory X% quarter just solid will are leading to see XXXX? a Delta inability everyone, inventory do shortages you want to? on to afternoon, will of be to and Salt meet to right more, you progress bit sounds wanted March the quarter understand sure saying the able Are operating clearly. the just you second I margin -- operating be margin XX

Deb Merrill

I will two those So, Dana, take yeah, questions.

what should So, exactly yes, we’re question, on the X%. second is March, saying, your the that approximate was that’s September which

of grow on we be because then is stronger as exactly fiscal been as the that, we constrained far concerned, ability Delta that. this to has year that think inventory inventory you’re And have would achieve So right we the in saying yes, to sales that. than throughout able Group

into sales, be just that the available less for XX% doing. We flow back We’ve that all-time strong course to are despite and levels, now been to inventory U.S. having had sales of producing sale. at maintain the but record an has we’ve production then

replenishing each We’re our gaining be hoping inventory to and on those levels quarter.

spring inventory that XXXX in quarter normalized better which passes, each really spring be the start being to means March hopefully, we a level position that having be normalized, that of inventory will selling So, begin with selling the new by back which goal our to would season, to on place season.

Dana Telsey

seeing that’s Got cycle? the just an you’re us How on you changing? inflationary it. what thinking how could about And pricing, update give you’re on

Bob Humphreys

we every business pandemic, in transportation really before we’re most started and wages America, now, that and I’m about talked It sure costs. with the Yeah. right inflation. Like seeing

in business, on have our time and slowdowns water what of shipping time, areas all in the it seeing you. We’re

six have of if continue. we in we a prices increases increases see number So the to in further expect price had last months these selling and would trends our

Dana Telsey

Got it.

well. been Just Any you’re doing That and has like wholesale? any by very retail there their the performance? channel, in seeing stores what on own update channel color further Life sounds Salt

Bob Humphreys

performance three the channels, retail. Life is for in Salt strong brand channel strong. been e-commerce business demand the has and all really So wholesale, The

stores. have retail we think enough I

being have prior really story work. the people telling rapidly the how so that and really are same-store and year our to merchandised, it’s see our product out omnichannels seeing are growing Now the over to and our there well nice sales product see really been

spring wholesale XX% year. are about for up bookings Our saw what from this we

So still really market, strong demand too. in the wholesale

Dana Telsey

you. Thank

Operator

[Operator Instructions] All right.

We have a Wilen from Management. Jamie question Wilen with

Jamie Wilen

when or coming I be Have we of couple was think quarter? that in it you that that mentioned to taken is A this going of $X.XX was fourth excellent different had areas, in -- have costs, we the $X.XX quarter. other quarter. we already $X.XX the Soffe

Deb Merrill

No. That’s quarter. in incurred first and second the been already

we the that some starting benefit odd amount on $X.XX initiative -- all have of the to and in starting fourth now from XXXX So increase flow in initiative. that should completed through, really way fiscal that $X.XX be profitability in but quarter, having with to

Jamie Wilen

loaded? that’s So the beginning start $X.XX $X.XX or with first is to flowing quarter to that going back-end through quarter

Deb Merrill

Correct. no, will relates little some quarter. be be each and would because, it increases distribution back distribution of -- Yeah. to no. the costs, but course, No, there I bit a of end, will

Jamie Wilen

Honduras. is inventory you shortage The in Is that of the basically most this correct? product that Okay. have, made

Bob Humphreys

Honduras Salvador. extent, Well, to some yeah, Mexico, El and

so to of retailer directly brand, or that inventory an most a at-once there’s goes there. Although, not

Jamie Wilen

difficulty having It you? seems but to to inventory the United does how get to like through this from getting people were China, States flow

Bob Humphreys

that… of none So

Jamie Wilen

And why you have indeed do a shortage?

Bob Humphreys

Yeah.

comes what China from we’re of So about. of that talking none

sell. the XX% over all we of garments that We’re manufacturing

so just more we’re we have. can we And than we ever sell have. ever making more It’s than

driven example, for But in then so. is things from into in And that sewing the supplies. of And over chain can threads, shipping demand eight lack has degree. in last boxes, us, then labels, some very But shortage U.S. driven like it’s are to everything you workers U.S. the a to this doubled supply, that tight or of yarn, to tight by so the the supply Central America comes ultimately think weeks the time about

So our extra and that we it has the to while more consumers have will shipping bubble we been that our same in, in a through kind have get we know. we out can’t stagnant but have that going be coming with of inventory velocity to product, is come coming made that

Jamie Wilen

will the and and increasing Do much and you you in be that look satisfy XXXX America as to by at manufacturing of capability production XXXX? enough how your have the needs Central

Bob Humphreys

Yes.

talked equipment as able It’s production We unit probably commitments tees in. will of about, X% in we that be have Deb sort to basic already to, fleece and going for X% thing. additional coming add to and

whenever I I post-pandemic, think have post-pandemic, think consumer and But some what is that in we the changes seen we and marketplace got demand to figure whenever structural are is. we in behavior. that see what we

the And make fact type so have about service demand forward-looking retailer service in bullish products now and direct and I’m the probably And we’re to stayed I’ve of our been we while for able been supply and stayed We’ve for product, to than chain to major that high. production. brands. ever has very brands our customers. more And the our retailers we on being that tight very major

been of some us I years started for marketplace think before. it’s the now, saying really a And these trends as so degree. couple in to we’ve differentiated And

that, apparel. we’re this with trying hemisphere. a the And production lot brands And started bring so in retailers, more we leader and named of major into brands, to really major we’re

trend that. lot whether the human or only over is various us or is then with on trend, what is a us, to Asia, work rights big it’s I this and gets this rules time wave going of think it, it top the pandemic small have for areas And in accelerating add you, when you so it’s some so. a of be or And concerns a to a that

Jamie Wilen

bring have bit opportunities Got under what that - it. the could your On DTGXGo, now under it wing, about describe to that business? a you little you’ve can Autoscale see you more

Deb Merrill

it marketing out and said, got you are integrated DTGXGo we’ve our fully as in And Yes. that. with business

And for expect really then We them to the monetize the this bring libraries, those fourth they to on to quarter be it their them provide in the to art what customers next it some tools that a is consumers. to able graphics tool year. by graphics to have into launch giving and

are don’t And lot times market. but in that, get they know interested art so a how their of libraries then people to to

them sales integrated give then and the and And able production seamlessly into they so, those that them that that do seamlessly generate. to have to this will can technology we be allow so our that DTGXGo service

launched to that get we’re opportunities DTGXGo. in So quarter new bring and see then excited to and grow this continue fourth to to that

Jamie Wilen

it. Got

brought you on Could respectable additional some retail chains you mentioned brought of quantify how You on? you’ve chains. traditional size many

Deb Merrill

what servicing servicing. yes, different mean, probably So, we doubled far as retailers, we’ve as I are

XX%, increase. ones has now not increase, So which doubled we that the ones generated existing the generated the increase just probably the quantity, new that what then but plus in that XX% have the

Jamie Wilen

Okay. Hot with there evolution now in stands? Topic, about it relationship where the And and can you talk

Deb Merrill

continues own in we on to their grow on and mentioned and That and Absolutely. growth supporting that itself business. of that

We have the process site that utilize that performance they’re the they are the of to in based have that we capacity and that integrated that. seeing the initiatives upon in doubling

not facilities other but that the we also they we advantage the only of the the network reminder, in integrated country. a facility, take of have then the capacity put they utilized that across As

benefits the integrated get plus of facility that with benefits of the the network, they the we have them. So full

Jamie Wilen

retailers other copy model? the to Bob. looking Are that sorry, traditional Go on,

Bob Humphreys

there sell working shipments. on in-store we as along getting of because And were and types on Hot started Topic players the just on add now we saying these booked box other for our That When business e-retailers XX Yeah. our ago. Deb retailers, their big the to they time what’s was vision for was with vision really about for both future. we was the to That model. these then DTGXGo fulfillment, as Board, e-commerce I grow which first at what years and starting in-store all was business, would in vendors with entities.

are the be that we these growth think now come, the quarter. seeing it’s really But integrated. lot talked and to lot T-shirts. we an I there’s Deb to this saw about selling awful in start of really of is a more so that channels And market

we’re So coming have to along. excited that

Jamie Wilen

the kind same that of traditional the is moving retailers Hot of other So now? the are utilizing Topic same model kind path,

Bob Humphreys

exact Yeah. I one know copies don’t model. that any one

digital their But centers their are their think on major are strategy, systems, more digital where we embark through located. either printing. conversations some I distribution and starting additional it’s on to Sometimes, produced done well. there’s have to and that most that technology e-commerce And as more more in-store product, retailers a we that replenishment their have or will selling that and lead R&D printing think particularly channel are we of already

Jamie Wilen

That’s Great Fantastic. quarter. it.

Deb Merrill

Thank you.

Bob Humphreys

you. Thank

Operator

our next [Operator take Next Mark Shawn from Instructions] Boyd Capital. with We’ll question

Shawn Boyd

for my Can hear okay? taking question. you me Thanks

Bob Humphreys

sir. Yes,

Shawn Boyd

Great.

go one think comments we the we’re in. the the talking last comments in of about one -- to script, back quarter the now I to inventory want as are shortages Just of the and

Is digits. that September or is growth quarter? mid-single versus that XXXX You of sequential about talked

Deb Merrill

an fiscal take have quarter quarter our That’s quarter quarter. Yeah. actually -- reminder as to quarter the a it got the week and to growth. reminder and from that, was that for -- we in just then stronger in compared XXXX having year-over-year adjust for you’ve would fiscal our then the fiscal -- XXXX and year’s additional Correct, past as than September yeah, XXXX single-digit much quarter quarter well, mid as

last week, than fiscal adjusting -- that our that quarter. that course, in would then, and XXXX quarter our we’ll put growth so September for saw even XXXX we quarter nice year of stronger So put strong

Shawn Boyd

Okay.

week that adjusted it’s it’s of last year-over-year week production So or that year, one a for extra comparison?

Deb Merrill

That is correct.

Shawn Boyd

Okay. Got it.

December or are into inventory should inventory I shortage working -- say, So into December the this through now constraints, we the quarter.

give as to, talked to of just Life FY look an growth, about that sort And this bit annual of the into Could out even in XXXX? past, growth of a X% be and occurring? you looks Delta XX% company what Group that’s to can where little basis. constraints pull So we’ve preliminary kind go high that, out or us I maybe like or from think, the speak shortages Salt a single-digit talk you the given about on kind the I’ll overall to back should

Deb Merrill

opposed Yeah. growth fiscal would in we that we say growth to able breaking quarter, each see at out, we see that growth expect to least XXXX XXXX, And in would but through expect do those as kind as that will range to you we that to mentioned just that to rates. as upper double-digit fiscal single- quarter, we every compared low go be of

Shawn Boyd

Got it.

helpful. Very Okay.

for shortage this point that that On where from something around lower at tight the you’ve that something we the and much quarter then there got for is that labor Is progress pretty or, labor resolved excuse we’ve that’s had. issues you me, sticks little the margin a or this while? that and

Bob Humphreys

back. having are really them our so even that, We a held distribution to our sure retail we see week, being really they’re mean, week, seven with in in days days the U.S. because Well, strong to most stores for get see centers stores, seven We’ll Yeah. it’s a growth. hard tell. not where in of open bit little and not retail resolved yet have being for it -- and so it’s can’t able our I we it a staffed

So we’re to being back DCs, people retail our and operate held to stores. by just DTGXGo equipment our people our operate

increases of gross products strong would of starting had checks to but distribution, margins out and -- to so in although, as price will And for gross run school, quite that a flow quarter. if not ultimately help that it’s as timing the we we the get kids as not affecting work. higher hoping margins, strong unemployment of stimulus past be function product, go a But bit. we’d cost the back in more motivated hopefully, as this through and gross margins more be We’re our to extra costs, levered different really and back still channels fall achieved people little inventory but us, in in

Shawn Boyd

Got it. Got it.

This like ramming Okay. XXs kind really year. out is me to is pandemic Salt It second. breaking Life bit. don’t seems on year last that speak. just know, focusing a at I a and of was, The business speed, we’re from little for high a of Last was one kind so

So maybe business. to $XX XXXX, we to back million need up

exceeding couple directed is How What in of percentage You’re of kind that be you How little of substantially common this Just in would the stores? to understand here bit this be year. going we Salt to the big big of down to more road? Where does e-commerce? business it look are on going? terms retail a Life particular? a trying years direct consumer all

Bob Humphreys

years back and you So, look XX% we had growth. if two about

of Salt it obviously been obviously, that our and back, we’ve But was above done pandemic XX% year looking that Life slightly year, a So we there. -- a that. that had we’ve kind at rate grow to we in goal saying

I store a the very of got deciding proof-of-concept thing our we’ve exciting retail is, think now rollout. the thing most or

And months in it’s a so and acquisition. like our a did money, pace We not of store of first we’ve as now few roll And making model finding our branded a the are We’ve growing our Florida, is stores part Jacksonville, and It’s got but or leases. we’ve doing in stores we store. them big were that got signing last a now. out. and behind months, us locations three a brand started which where pieces. the marketing good a nice four original That’s got team to

this next will fiscal one more If open, year. we’ll year. got open we fiscal get five least believe, we at stores that So

so we million. per performing which like for on well adds store. expect a We’ve year some would probably $XXX,XXX now us got of $X average in excess pace And that, just a

-- pre-book, of mentioned show Life a take so Life We be lines orders that go wholesale our big I and growth. business. we business, Salt So would driver in. bring that customers, our runs as on pre-book to our and inventory a earlier, we we of Salt But time ahead

just So from last we’re not year. big business are We We year. social When to that sales their through to thinking we it really bringing nicely. about beach, pre-book exciting growing same faster today, at are we in above looking be well Life to try Salt channels that desire the as what’s Life well. is of want big and the inventory Salt the have a in that growing Salt not And at the We they’d our the Life out, you thing. punching the still way show And weight serviced for And which pandemic that that quarter, quarter the up spike this and and is engagement sell. consumer our this e-commerce serviced we’re pandemic Anyway, Salt living year. and goes won’t spike for well. last just had time a really beach. going take to the say, doing product. if is media Life. go Customers Obviously, there they’re even business XX%

it feel it getting getting a level. next that’s of like does do about we’re the to we seem that and to good So now growth pace

Deb Merrill

that at And as I digits, would roll all double XX% growth. be to compounded had just Bob we say, business together targeted a mentioned, to this topline so

at gross operating even the to that to retail direct-to-consumer also to us fiscal expands in of that XXXX doors then growth nicely new bottomline XXXX already, channel, doors margins drops With e-comm all then allow adding retail in should that well as both the the the in in the exceed and margins. strong a that that equate And year. and and business we’re obviously the

that things in even XX% certainly So topline the get goal XXXX. of fiscal all and allows of to those exceed to up added that us

Shawn Boyd

operating very difficult Got environment. on then great result you it. for Well, Got and it. the thank in very much color a congratulates a

Deb Merrill

you. Thank

Bob Humphreys

you. Thank

Operator

any this further at remarks. turn the closing time. And Humphreys there are or I over like for to call no Bob questions additional to would

Bob Humphreys

you and click interest about finish on to fast in for eight year. believe your the go months fiscal to weeks hard time year to quarter. Apparel, in for got we how Okay. only full Delta updating your It’s and results much few you Thanks our fourth they by. look the to in interest. Well, a we’ll very thank But forward

Operator

today’s conclude Thank you does that And your presentation. for participation.

disconnect. now may You

Delta Apparel (DLAPQ) 8 Aug 212021 Q3 Earnings call transcript