Top 40 supplier Delta Apparel (asi/49172) says that its total global sales dropped 14% during its recently concluded fiscal year, a performance that contributed to a $33.2 million annual loss.

The Duluth, GA, company reported Dec. 7 that sales for the 12-month period ended Sept. 30 reached $415.4 million, down from $484.9 million the prior year.

The figure tallies Delta Apparel’s sales across all of its business channels, not just the promotional products industry. The firm’s Delta Group segment, which houses promo and other market verticals, registered net sales of $356.3 million, down from $424.8 million in the previous year.

Fourth-quarter sales for all of Delta Apparel’s business channels were $91.4 million, about $24 million lower than last year’s Q4.

The full-year $33 million loss, which translated to a per diluted share loss of -$4.75 for investors in the publicly traded firm, compared to $19.7 million in net income during the 2022 fiscal year. Net loss in the fourth quarter of fiscal 2023 in particular was $16.4 million, or -$2.34 per share.

Full-year gross margins were 13% compared to 22.4% in the prior year. Operating income declined year-over-year from $31.8 million, or 6.6% of sales, to an operating loss of $29.4 million.

“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,” said CEO Robert W. Humphreys.

Indeed, low demand following a rampant stock-up amid the economic bounceback from COVID-19 the year before hurt Delta Apparel’s sales. Higher cotton costs, expenses associated with production reductions, an impairment charge, and costs associated with various strategic actions weighed on the bottom line, the company told investors.

“The cost impacts of the elevated cotton pricing and low demand across our markets throughout fiscal 2023 was significant, but we continue to see encouraging indications that these dynamics are receding,” said Humphreys. “We believe our Delta Group segment is poised to steadily improve its operating performance in the new fiscal year.”

Other positive developments include that Delta Apparel has brought inventory down to better levels, reduced debt and created efficiencies through a streamlined offshore platform, the company shared.

“We currently expect to finish fiscal year 2024 with net sales in a range of $400 to $415 million, generating operating profit margins of approximately 2% to 3.5%,” Humphreys said.

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.