Delta Galil Q1 Income Leaps 300%

Passionata lingerie on the Chantelle’s U.S. website. The brand was recently acquired by Delta Galil. Left, Passionata’s Brooklyn Plunge Bra; right Passionata’s Olivia Demi Bra.

Delta Galil Q1 net income jumped 300% while sales increased just 2%, as “gross margin increased to a first quarter record of 42.3%.” 

The company explained that “the 320-basis point expansion,” to the margin, “was due primarily to a better customer and channel mix, improved profitability of our factories due to higher volume, and lower freight costs.”

Net income rose to $12.049 million on sales of $450.779 million, compared to just $3.015 million on sales of $442.457 million in the three months ended March 31, 2023.

Delta Galil said sales grew “across most of the company’s segments,” and that “first-quarter online sales of the company’s own brands increased 18%.”

CEO Isaac Dabah declared, “Delta’s solid first-quarter results demonstrate the strength of our brands, the remarkable value and offerings we provide to our private label partners, and the successful implementation of the strategies we are pursuing to deliver strong revenue and earnings growth. Our performance during the first quarter is especially encouraging as we returned to year-over-year growth in sales with strong profitability and record first quarter operating cash flow. This is a testament to the hard work and dedication of our global teams, and the success of recent initiatives aimed at driving sales, improving operating efficiencies and realigning our manufacturing capabilities.”

He added, “our strong balance sheet and capital position provide us with additional flexibility to execute our growth oriented strategic plan. During the first quarter we successfully completed the previously announced acquisition of Passionata, which adds a complementary intimate brand with a strong global and millennial following to our portfolio.”

For the full year, “management expects 2024’s financial results to be in the mid to upper part of its original guidance range,” adding that it “expects growth in 2024 to materialize mostly in the second half of the year.”  Delta Galil now predicts sales to be in the range of $1.991 to 2.031 billion with net income of $106.9 to 114.7 million.