Israels' Delta Galil delivers 5th straight quarter growth in Q1 FY25
The company saw strength across all segments and channels, with online sales of its own brands increasing by 21 per cent. Gross profit expanded 6 per cent to $202.6 million, although gross margin narrowed to 40.6 per cent from 42.3 per cent due to higher freight costs, adverse foreign exchange rates, and a reduction in Egyptian export subsidies.
Delta Galil reported record Q1 FY25 results with sales up 11 per cent to $498.7 million, marking its fifth consecutive quarter of growth. Net income rose 46 per cent to $17.6 million, while online brand sales grew 21 per cent. Despite margin pressure, EBIT climbed 26 per cent. The company withdrew prior guidance due to new US tariffs but expects limited impact and is implementing cost-saving measures.
The EBIT rose 26 per cent to $32.7 million, and EBIT before non-core items increased 11 per cent. Net income surged 46 per cent to $17.6 million, while EPS jumped 56 per cent to $0.62. Excluding non-core items, net income and EPS grew 22 per cent and 26 per cent, respectively, Delta Galil said in a press release.
'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 YoY gains in EBIT, EBITDA and net income,' said Isaac Dabah, chief executive officer (CEO) of Delta Galil .
'While the macroeconomic environment has grown more complex amid evolving US 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,' added Dabah.
'With a profitable model, and a strong balance sheet, we are 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 Dabah.
Delta Galil forecasts that the impact of current US tariff rates on its 2025 annual operating income will not exceed $20 million. To help offset this, the company is implementing cost-saving measures aimed at reducing annual operating expenses by $5–7 million.
The company's previous guidance, outlined in its 2024 annual report, did not account for the recent US tariff legislation. Due to ongoing uncertainty around country-specific reciprocal tariff rates, that guidance has now been withdrawn, added the release.
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