Israel's Delta Galil posts $539 mn Q3 sales on strong DTC surge

EBIT excluding non-core items stood at $51.2 million, reflecting higher SG&A costs related to exchange rates, retail expansion, DTC investments, the Passionata brand and SAP implementation. Net income excluding non-core items rose 2 per cent to $32.8 million, while reported net income was $31.4 million. DTC sales of the company’s owned brands increased 19 per cent YoY.

Diluted earnings per share (EPS) excluding non-core items was $1.15. EBITDA excluding IFRS 16 reached $59.6 million. Operating cash flow fell to $25.2 million due to higher working capital requirements. Net debt to EBITDA stood at 0.9x, and equity rose to $880.7 million, Delta Galil said in a press release.

“Our third quarter results highlight the strength and resilience of the Company. Despite a challenging macro-economic environment, including tariff-related cost pressures, we increased sales year-over-year and expanded gross margin to a third quarter record of 43.3 per cent. Our direct-to-consumer business continued to gain strong momentum with 19 per cent sales growth, benefitting gross margin and reinforcing the strength of our brands and our digital strategy,” said Isaac Dabah, CEO of Delta Galil.

“During the third quarter, we continued to make strategic investments in our factories and distribution centres to improve efficiencies, while simultaneously expanding our retail locations in Germany and Israel. We believe these initiatives position us to accelerate profitable growth. Looking forward towards 2026, we remain focused on innovation, operational excellence, and strategic capital investment, which we believe will deliver sustained value for our customers, partners, and shareholders,” added Dabah.

In the first nine months (9M) of 2025, sales rose 4 per cent to $1.5078 billion, driven by 15 per cent DTC growth. The gross profit increased 5 per cent to $637.1 million, with gross margin improving to 42.3 per cent. DTC sales of the company’s owned brands increased 15 per cent YoY.

EBIT excluding non-core items reached $114.9 million. Reported EBIT stood at $113.3 million. Net income excluding non-core items remained stable at $67.2 million, while reported net income rose slightly to $65.7 million.

Diluted EPS excluding non-core items was $2.33, while reported EPS was $2.28. EBITDA excluding IFRS 16 totalled $139.2 million. The operating cash flow dropped to $42.3 million.

Delta Galil reaffirmed its full-year 2025 guidance despite additional tariff exposure from the suspension of the US ‘de minimis’ exemption. The company now expects a total negative operating profit impact of around $25 million for 2025 with sales projection of $2.11-2.135 billion, with EBIT of $171-176 million, and EBITDA of $275–279 million. Net income is expected to reach $97-101 million, with diluted EPS forecast in the range of $3.32–3.46, excluding non-core items.

ALCHEMPro News Desk (SG)