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Delta Apparel (NYSE:DLA) was downgraded by investment analysts at Ascendiant Capital Markets from a “buy” rating to a “hold” rating in a note issued to investors on Friday, reports.

The analysts wrote, “Yesterday after market, DLA reported Q3 results $0.27, a considerable miss to our $0.71 estimate. While $0.12 of the miss was due to higher cost cotton, the major reason behind the miss stemmed from the company’s inability to leverage its fixed cost on lower sales, which we attribute to the challenging retail environment. “Admittedly this isn’t the first quarter where DLA’s revenue has been down, but we believe it is the first quarter where it was down in all tiers and all channels in both segments. Albeit painful, we believe the disappointing results have paved the way for the company to right size its infrastructure. As such, the company is evaluating all underperforming business units, product lines and sales channels and is reorganizing its administrative structure at all levels to streamline decision making and information flow as well as reduce duplicative and excess fixed costs. “Headcount reductions (which include the President and COO; however, this also means Chairman Bob Humphreys, who we credit for building the business, is back and now running day to day operations) should generate ~$7 million in annualized savings, with about $5 million recognized in FY15. Associated with the headcount reduction, DLA expects to incur approximately $2.5 million in severance related expenses in Q4.”

Separately, analysts at Sidoti downgraded shares of Delta Apparel from a “buy” rating to a “neutral” rating in a research note on Thursday. They now have a $12.00 price target on the stock, down previously from $20.00.

Delta Apparel (NYSE:DLA) remained flat at $10.89 during trading on Friday. The stock had a trading volume of 8,881 shares. Delta Apparel has a 52-week low of $10.05 and a 52-week high of $19.23. The stock has a 50-day moving average of $13.77 and a 200-day moving average of $15.30. The company’s market cap is $86.4 million.

Delta Apparel, Inc (NYSE:DLA) is an international apparel design, marketing, manufacturing and sourcing company that features a portfolio of lifestyle branded activewear and headwear and private label programs.

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