(Filed Under Financial and General Interest News). First quarter profit fell dramatically at Delta Galil, from $18.9 million last year to $3.0 million this year, as sales slid 9%, with the company citing a “heavily promotional retail landscape.”

For the full year the company said it expects its results to be at “lower end of the company’s” previous guidance range, with net income of $120.9 million on sales of $2.0 billion, compared to actual net income of $120.6 million on sales of $2.0315 billion in 2022.

Delta Galil earned $3.015 million on sales of $442.457 million in the first three months, compared to a profit of $18.945 million on sales of $483.873 million in the quarter ended March 31, 2022.

CEO Isaac Dabah stated, “We believe we will see growth in sales and profitability in the second half of the year driven by a solid pipeline of new customers and licenses, as well as multiple new brand launches, including a new collection for the recently acquired Organic Basics.” He added, “We believe we are well positioned to navigate the current market environment, while streamlining our operations and investing in strategic growth opportunities.”

Delta Galil revealed that “as part of the company’s strategic focus to improve its production flexibility, capabilities and competitiveness, and to further streamline its operations, the company approved a restructuring plan which includes actions to:

— shut down the Bare Necessities distribution center and transition to a third-party fulfillment center in Mexico;

— relocate its Egypt cut and sew operations from Cairo to El-Minya;

— shut down its socks production facility in Bulgaria, moving production to a new facility in Egypt;

— and implement efficiency measures in the company’s 7 for All Mankind segment.”

The company concluded that the “total cost of the plan--included in first quarter results as a non-core item--amounted to $5.4 million (including a $3.9 million cash impact). The company estimates annual savings from the plan at approximately $7 million, a portion of which will be realized in 2023.”

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Published 05-22-2023 by -