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16th May 2019, Tel Aviv

Strong performance from Delta Galil brands

Delta Galil Industries is a leading manufacturer and marketer of branded and private label apparel products for men, women and children.Delta Galil Industries, a manufacturer and marketer of branded and private label apparel products, has reported its financial results for the first quarter that ended on 31 March 2019. Net income was US$ 3 million in the first quarter of 2019, compared to US$ 7.4 million in the same quarter last year, a 59% decrease.

“We concluded the quarter with a 9% increase in sales and a significant improvement in cash flow; however, our first quarter results were impacted by the devaluation of the Euro and NIS versus the US dollar, and a shift of holiday sales to the second quarter,” commented Isaac Dabah, CEO of Delta Galil.

“Still, we remain pleased as we continue to benefit from a diversified model, including a range of business segments, product categories and an expanded global presence, that enables us to drive momentum and balance. In the first quarter of 2019, we saw a strong performance from Delta Galil USA, Global Upper Market, and a contribution from Eminence.”

Results

The company reported a 9% increase in sales of US$ 365.4 million for the first quarter of 2019, compared to US$ 334.5 million for the first quarter last year. The sales increase largely reflected top-line growth in Delta Galil USA, Delta Galil’s Global Upper Market, Delta Israel, and Delta European Brands, which included a strong contribution from its newly acquired Eminence business. Operating profit was US$ 10.4 million for the first quarter of 2019, compared to US$ 14.0 million in the first quarter of 2018, representing a 25% decrease. EBITDA was US$ 30.6 million in the first quarter of 2019, up 43% from US$ 21.4 million in the same quarter last year.

“During the quarter, we continued to improve efficiencies at our factories and expect full operational status for 2019. Our Delta Galil Premium Brands business was impacted by the shift in holiday and the depreciation of the Euro, as well as a new store opening expenses; however, it remains an exciting growth opportunity,” Mr Dabah continued.

“As we look ahead, we remain committed to investing in new products and resources to deliver sustained profitable growth and long-term shareholder value. With a strong balance sheet in place, we have the necessary financial resources to continue to innovate and grow – both organically and through strategic acquisitions.”

Outlook

Delta Galil reaffirmed its 2019 financial guidance, excluding one-time items, which is based on current market conditions and current exchange rates. The company’s financial guidance for 2019 includes the impact of IFRS 16 on accounting for leases.

Full-year 2019 sales are expected to range between US$ 1,550 million-US$ 1,590 million, representing an increase of 3%-6% from 2018 actual sales of US$ 1,498 million. Full-year 2019 EBIT is expected to range between US$ 112 million-US$ 117 million, representing an increase of 14%-19% from 2018 actual EBIT of US$ 98 million. Full-year 2019 EBITDA is expected to range between US$ 189 million-US$ 194 million, representing an increase of 45%-49% from 2018 actual EBITDA of US$ 130 million.

Finally, full-year 2019 net income is expected to range between US$ 64 million-US$ 67 million, representing an increase of 5%-12% from 2018 actual net income of US$ 60 million.

www.deltagalil.com

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