A new fiscal year didn’t bring an end to now-familiar struggles for Top 40 supplier Delta Apparel (asi/49172), which experienced lower sales and a net loss as it cut jobs and worked to reduce debt and overhead in the first quarter of its new fiscal year, according to a financial report released Feb. 12.

The Duluth, GA-headquartered apparel provider generated total revenue of $79.9 million, a 25% year-over-year decline, in fiscal Q1, which concluded Dec. 30, 2023. The figure accounts for sales across all of the publicly traded company’s channels, including the promotional products market, retail and others.

Delta Apparel posted a quarterly loss of $8.5 million, or -$1.22 per share, in the first quarter. That was worse than the prior year, when loss was $3.6 million, or -$0.51 per share.

Meanwhile, things were bleak on operating loss too; the loss increased from $2.6 million in last year’s Q1 to $4.9 million in this latest quarterly go-round. Loss before interest, taxes, depreciation and amortization was $1.3 million.

Delta Apparel’s quarterly sales in its Delta Group segment, which includes business with the promo industry, were down about $27 million year over year in the first quarter to $69.6 million.

On a positive note, the supplier asserted that it has reduced debt. Its inventory levels – which, if inflated, can hurt the bottom line –are reportedly down 24% on an annual basis.

Executives said that Delta Apparel is streamlining offshore manufacturing by reducing its footprint to two countries and consolidating production in what leaders described as the company’s more efficient Central American operation.

“We completed similar consolidation work in our DTG2Go digital print business and significantly reduced other areas of our workforce to better align our cost structure with the lower demand we continue to see across much of our business,” said CEO Robert Humphreys.

A bright spot for Delta Apparel was that sales of its flagship retail brand, Salt Life, increased. Still, what the firm described as sluggish demand in other verticals led to the overall poor performance.

“With the challenging start to our fiscal year and demand across most of our markets generally expected to be flat relative to last year,” said Humphreys, “we remain tightly focused on managing liquidity and working capital across all aspects of our business and will continue to look for areas where we can generate efficiencies and further streamline operations.”

In Delta Apparel’s previous fiscal year, the company reported that its total global sales dropped 14%, a performance that contributed to a $33.2 million annual loss.

Based on estimated North American promotional products sales of $49.6 million, Delta Apparel ranked 37^th on Counselor’s most recent list of the largest suppliers in the industry.