Delta Gali: Record Sales

Delta Galil Q1 net income rose 46% to $17.603 million on on 11% higher record sales of $498.67 million. The company said its “fifth consecutive quarter of year-over-year growth” was driven “driven by growth in all segments and channels.”

CEO Isaac Dabah noted that “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.”

Delta Galil revealed that “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..”

Delta Galil also canceled its prior financial predictions for 2025. “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 In light of the uncertainty with respect to country specific reciprocal tariff rates, the company has withdrawn its prior guidance.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.”