Record First Quarter Sales Increased 11% with Strength Across All Segments and Channels, Representing the 5(th) Consecutive Quarter of Year-Over-Year Growth
Record First Quarter Gross Profit Expanded 6% to $202.6 Million
First Quarter EBIT Increased 26% to $32.7 Million
First Quarter EBIT Before Non-Core Items Increased 11%
First Quarter Net Profit Increased 46% to $17.6 Million
First Quarter Net Profit Before Non-Core Items Increased 22%
Strong Balance Sheet with Net Debt to EBITDA, Excluding IFRS 16, of 0.7x
Dividend Declared of $8.0 Million for the First Quarter 2025
CAESAREA, Israel--(BUSINESS WIRE)--May 22, 2025--
Delta Galil Industries, Ltd. (DELG/Tel Aviv Stock Exchange), the global designer, manufacturer and marketer of branded and private label intimate, activewear, loungewear and denim apparel for ladies, men, and children, today reported financial results for the first quarter ended March 31, 2025.
-- First quarter sales increased 11% to a first quarter record of $498.7
million, driven by growth in all segments and channels
-- First quarter online sales of the Company's own brands increased 21%
-- Gross profit in the first quarter increased 6% to $202.6 million,
compared to $190.5 million last year
-- First quarter EBIT before non-core items increased 11% and reached $32.7
million, compared to $29.4 million, for the first quarter last year
-- Net Debt to EBITDA, excluding IFRS 16, was 0.7x for the quarter ended
March 31, 2025, compared to 0.7x last year
-- Strong balance sheet with $91.9 million in cash and record shareholders'
equity of $817.7 million at March 31, 2025
-- Declares a $8.0 million dividend for the first quarter 2025, same as for
the first quarter last year
Isaac Dabah, CEO of Delta Galil, stated, "Delta delivered record first quarter sales, reflecting strong momentum across all segments and retail channels. Our top-line performance underscores our efforts to fuel the growth of our brands and partners through exceptional design and a relentless focus on innovation, quality and sustainability. This growth, combined with disciplined cost controls, yielded solid year-over-year gains in EBIT, EBITDA and net income."
Mr. Dabah added, "While the macroeconomic environment has grown more complex amid evolving U.S. trade policies, our growth initiatives remain on track. We continue to see strong demand from key customers and are well positioned to gain market share due to our strategically located manufacturing facilities in countries with low tariff exposure."
"With a profitable model, and a strong balance sheet, we're well-positioned to invest in our multi-year growth plan. We believe our powerful platform, committed team, and global focus, will allow us to navigate any near-term economic challenges, while pursuing long-term growth opportunities to deliver lasting value for our shareholders," concluded Mr. Dabah.
Sales
The Company reported first quarter 2025 sales of $498.7 million, an 11% increase from $450.8 million in the first quarter of 2024.
Gross Margin
Gross profit in the first quarter was $202.6 million compared to $190.5 million in the first quarter of 2024.
Gross margin in the first quarter of 2025 was 40.6% compared to 42.3% for the same period last year. The year-over-year reduction in the first quarter gross margin was due primarily to higher freight costs, 90 basis points impact of foreign currency exchange-rates and lower export subsidy in our Egyptian operations.
EBIT
EBIT in the first quarter of 2025 was $32.7 million, compared to $26.0 million, in the first quarter last year.
EBIT before non-core items in the first quarter of 2025 was $32.7 million, or 6.6% of sales, compared to $29.4 million, or 6.5% of sales, in the same period last year.
The year-over-year increase in first quarter EBIT was primarily due to higher sales and controlled operating expenses.
Non-Core Items
For the first quarter of 2025, the Company recorded no non-core expenses. For the first quarter of 2024, expenses associated with the Company's previously disclosed realignment plan for Bare Necessities were $3.4 million.
Net Income
Net income in the first quarter of 2025 increased 46% to $17.6 million, compared to $12.0 million in the same period last year.
Net income excluding non-core items, net of tax in the first quarter of 2025, increased 22% to $17.6 million, compared to $14.5 million in the first quarter of 2024.
Diluted Earnings Per Share
Diluted earnings per share in the first quarter of 2025 increased 56% to $0.62, compared to $0.39 in the first quarter last year.
Diluted earnings per share, excluding non-core items, net of tax, increased 26% to $0.62 in the first quarter of 2025 compared to $0.49 in the first quarter of 2024.
EBITDA, Cash Flow, Net Debt, Equity, and Dividend
EBITDA, excluding IFRS 16, in the first quarter of 2025 increased 7% to $40.5 million, compared to $37.7 million in the first quarter of 2024.
Cash flow generated from operating activities, excluding IFRS 16, was $4.0 million, compared to $23.5 million in the first quarter of 2024. The year-over-year reduction in operating cash flow was primarily attributable to changes in working capital to support expected sales growth, additional new brands and longer lead-time.
Net Debt to EBITDA, Excluding IFRS 16, as of March 31, 2025, was 0.7x and at a similar level compared to March 31, 2024.
Equity on March 31, 2025, was $817.7 million, up 7% from $764.6 million on March 31, 2024.
Delta Galil declared a dividend of $8.0 million, or $0.3065 per share, which will be distributed on June 10, 2025, with a record and "ex-dividend" date of May 28, 2025.
2025 Financial Guidance
The Company's previous guidance provided in its 2024 annual report did not include any impacts from new tariff legislation on imports to the U.S. that recently became effective. In light of the uncertainty with respect to country specific reciprocal tariff rates, the Company has withdrawn its prior guidance.
The Company is working to offset the effects of tariffs by sharing the impacts with its long-term vendors and strategically optimizing the Company's sourcing and production to countries with lower exposure to tariffs. The Company estimates that based on current tariff rates, the potential impact on 2025 annual operating income will not exceed $20 million. In addition, the Company is taking proactive measures to reduce annual operating expenses by $5-7 million.
Constant Currency - Excluding the Impact of Foreign Currency
This release refers to "reported" amounts in accordance with IFRS accounting principles ("GAAP"), which include translation and transactional impacts from foreign currency exchange rates. The release also refers to "constant dollar" amounts, which exclude the impact of translating foreign currencies into U.S. dollars, and are considered a non-GAAP financial measure. These constant currency performance measures should be viewed in addition to, and not in lieu of, or superior to, Delta Galil's operating performance measures calculated in accordance with GAAP.
About Delta Galil Industries
Delta Galil Industries is a global designer, manufacturer and marketer of branded and private label apparel products for men, women and children. Since its inception in 1975, the Company has continually endeavored to create products that follow a body-before-fabric philosophy, placing equal emphasis on comfort, aesthetics and quality. Delta Galil develops innovative seamless apparel including bras, shapewear and socks; intimate apparel for women; underwear for men including under its owned brands Schiesser, Eminence, Organic Basics, and Athena; babywear, activewear, sleepwear, and loungewear including under its owned P.J. Salvage and Delta brands. Delta Galil also designs, develops markets and sells branded denim and apparel under the brand 7 For All Mankind$(R)$ , and ladies' and kids' apparel under the brand Splendid(R) . In addition, it sells its products under brand names licensed to the company, including adidas, Wolford, Wilson, Columbia, Tommy Hilfiger, Polo Ralph Lauren and others. For more information, visit www.deltagalil.com.
Safe Harbor Statement
Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may" "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein, and while expected, there is no guarantee that we will attain the aforementioned anticipated developmental milestones. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, tax rates in the various countries the Company operates in, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Balance Sheets
As of March 31, 2025
March 31 December 31
-------------------- -----------
2025 2024 2024
--------- --------- -----------
(Unaudited) (Audited)
-------------------- -----------
Thousands of Dollars
---------------------------------
Assets
Current assets:
Cash and cash equivalents 90,188 187,369 120,509
Restricted Cash 1,732 1,859 1,305
Trade receivables 210,538 204,655 271,873
Income taxes receivable 2,805 1,436 1,927
Other accounts receivable 58,809 50,177 56,998
Financial derivative 8 76 160
Inventory 458,085 394,283 400,533
Asset held for sale 1,773 1,773 1,773
--------- --------- -----------
Total current assets 823,938 841,628 855,078
--------- --------- -----------
Non-current assets:
Investments accounted for using the
equity method and long-term
receivables 12,825 15,068 12,824
Investment property 2,464 2,585 2,401
Property, plant and equipment, net,
including under construction 302,825 253,698 288,346
Goodwill 139,411 144,730 138,033
Intangible assets, net of
accumulated amortization 297,458 292,567 294,899
Right of use assets 288,825 237,880 257,629
Deferred tax assets 31,694 30,967 30,537
Financial derivative 170 714 511
--------- --------- -----------
Total non-current assets 1,075,672 978,209 1,025,180
--------- --------- -----------
Total assets 1,899,610 1,819,837 1,880,258
========= ========= ===========
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Balance Sheets
As of March 31, 2025
March 31 December 31
-------------------- -----------
2025 2024 2024
--------- --------- -----------
(Unaudited) (Audited)
-------------------- -----------
Thousands of Dollars
---------------------------------
Liabilities and Equity
Current liabilities:
Short-term bank loans 12,014 38,102 2,335
Current maturities of long term
bank loans 21,567 24,965 20,939
Current maturities of bonds 29,471 29,662 29,476
Financial derivative 1,222 1,143 1,314
Current maturities of leases
liabilities 79,323 51,908 53,663
Trade payables 235,619 203,982 237,371
Income taxes payable 18,661 29,729 23,805
Provision for realignment plan 7,303 3,563 8,142
Others payables 173,623 142,261 194,900
--------- --------- -----------
Total current liabilities 578,803 525,315 571,945
--------- --------- -----------
Non-current liabilities:
Bank loans 118,310 133,471 124,163
Post-employment benefits
obligation, net 5,418 5,434 5,810
Lease Liability 230,972 206,311 225,802
Other non-current liabilities 48,103 53,441 49,105
Bonds 63,291 94,996 64,712
Deferred taxes liabilities 34,079 33,521 33,394
Financial derivative 2,957 2,746 1,765
--------- --------- -----------
Total non-current liabilities 503,130 529,920 504,751
--------- --------- -----------
Total liabilities 1,081,933 1,055,235 1,076,696
========= ========= ===========
Equity:
Equity attributable to shareholders in
the parent company:
Share capital 23,714 23,714 23,714
Share premium 123,800 126,219 124,025
Other capital reserves 23,651 23,168 15,590
Retained earning 632,409 573,560 625,912
Treasury shares (9,464) (12,026) (9,832)
--------- --------- -----------
794,110 734,635 779,409
Non-controlling interests 23,567 29,967 24,153
--------- --------- -----------
Total equity 817,677 764,602 803,562
--------- --------- -----------
Total liabilities and equity 1,899,610 1,819,837 1,880,258
========= ========= ===========
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Statement of Income
For the 3-month period ending March 31, 2025
Three months ended March 31 % Increase/(Decrease)
-------------------------------- ---------------------
2025 2024
--------------- ---------------
(Unaudited)
--------------------------------
Thousands of Dollars
--------------------------------
Except for Earning Per Share
data
--------------------------------
Sales 498,670 450,779 11%
Cost of sales 296,082 260,280
--------------- ---------------
Gross profit 202,588 190,499 6%
% of sales 40.6% 42.3%
Selling and
marketing
expenses 142,346 134,811 6%
% of sales 28.5% 29.9%
General and
administrative
expenses 28,048 26,407 6%
% of sales 5.6% 5.9%
Other income,
net and Share
in profits of
investees
accounted for
using the
equity method (486) (69)
--------------- ---------------
Operating income
excluding
non-core items 32,680 29,350 11%
% of sales 6.6% 6.5%
Non-core items - 3,360
--------------- ---------------
Operating income 32,680 25,990 26%
Financing
expenses, net 9,597 10,938 (12%)
--------------- ---------------
Income before
tax on income 23,083 15,052
Income taxes
expenses 5,480 3,003
--------------- ---------------
Net income for
the period 17,603 12,049 46%
=============== ===============
Net income for
the period
excluding
non-core items,
net of tax 17,603 14,486 22%
=============== ===============
Attribution of
net earnings for
the period:
Attributed to
Company's
shareholders 16,219 10,339
Attributed to
non-controlling
interests 1,384 1,710
--------------- ---------------
17,603 12,049
=============== ===============
Net diluted
earnings per
share
attributed to
company's
shareholders 0.62 0.39
=============== ===============
Net diluted
earnings per
share, before
non-core items,
net of tax,
attributable to
Company's
shareholders 0.62 0.49 27%
=============== ===============
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
For the 3-month period ending March 31, 2025
Three months ended March 31
-----------------------------
2025 2024
-------------- -------------
(Unaudited)
-----------------------------
Thousands of Dollars
-----------------------------
Cash flows from operating activities:
Net income for the period 17,603 12,049
Adjustments required to present cash flows
from operating activities 19,748 43,337
Interest paid in cash (8,961) (8,522)
Interest received in cash 439 1,234
Income taxes paid in cash, net (10,393) (12,524)
-------------- -------------
Net cash generated from operating activities 18,436 35,574
-------------- -------------
Cash flows from investment activities:
Acquisition of property, plant including
under construction (20,635) (12,295)
Acquisition of intangible assets (5,320) (17,364)
Proceeds from sale of property, plant and
equipment 1,724 220
Others (407) 416
-------------- -------------
Net cash used in Investing activities (24,638) (29,023)
-------------- -------------
Cash flows from financing activities:
Dividend paid to non-controlling
interests in subsidiary (1,679) (1,800)
Payment of long-term payable in
connection with acquisition of property,
plant and equipment under construction (1,203) (1,406)
Principal elements of lease payments (14,386) (12,087)
Dividend paid (10,023) (9,021)
Receipt of long-term bank loans 967 543
Repayment of long-term bank loans (7,434) (6,154)
Short-term credit from banking
corporations, net 9,463 37,282
Others (232) 1,734
-------------- -------------
Net cash generated from (used in) financing
activities (24,527) 9,091
-------------- -------------
Net increase (decrease) in cash and cash
equivalents (30,729) 15,642
-------------- -------------
Effects of exchange rate changes on cash and
cash equivalents 408 (2,736)
Balance of cash and cash equivalents at the
beginning of the period, net 120,509 174,463
-------------- -------------
Balance of cash and cash equivalents at the
end of the Period, net 90,188 187,369
============== =============
DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
For the 3-month period ending March 31, 2025
Three months ended March 31
-----------------------------
2025 2024
-------------- -------------
(Unaudited)
-----------------------------
Thousands of Dollars
-----------------------------
Reconciliations required to present cash
flows generated by operating activities:
Adjustments in respect of:
Depreciation 8,263 8,331
Amortization 16,812 17,610
Exchange rate (gains) losses (163) 410
Interest in respect of bonds and loans 5,623 5,798
Interest received in cash (439) (1,234)
Taxes on income paid in cash, net 10,393 12,524
Deferred taxes on income, net (1,701) (4,545)
Interest expenses recognized in respect
of lease agreements 3,338 2,724
Retirement benefit obligation, net (514) 187
Change in realignment provision (839) (11)
Gain from disposal of property, plant and
equipment (477) (76)
Share-based payments expenses 414 401
Share in profits (loss) of investee
accounted for using the equity method 147 (60)
Others 271 (1,241)
-------------- -------------
41,128 40,818
-------------- -------------
Changes to operating assets and liabilities:
Decrease in trade receivables 63,763 33,480
Increase in other receivable (1,888) (1,777)
Increase (decrease) in trade payables (6,604) 35,460
Decrease in other payables (23,823) (28,330)
Increase in inventory (52,828) (36,314)
-------------- -------------
(21,380) 2,519
-------------- -------------
19,748 43,337
============== =============
View source version on businesswire.com: https://www.businesswire.com/news/home/20250522253869/en/
CONTACT: For more information:
Nissim Douek
+972-54-5201178
Nissim@unik.co.il
U.S. Media Contact:
Stacy Berns
Berns Communications Group
+1-212-994-4660
sberns@bcg-pr.com
(END) Dow Jones Newswires
May 22, 2025 08:30 ET (12:30 GMT)
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