Delta Galil: Sales +3%, Profit +2%

Items on the Passionata web store. Copacabana One Piece, $125; and Maddie Wired Memory Cup T-Shirt Bra, 55,00€. The brand was acquired by Delta Galil last year.

Delta Galil Q3 earnings rose 2% as sales increased 3%, and it added that “record third quarter direct-to-consumer sales, increased 19% year-over-year.” The company earned $31.409 million on sales of $538.979 million compared to a profit of $32.045 million on sales of $524,234 million in the three months ended September 30, 2024.

CEO Isaac Dabah explained that “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%.” He continued: “during the third quarter, we continued to make strategic investments in our factories and distribution centers to improve efficiencies, while simultaneously expanding our retail locations in Germany and Israel. We believe these initiatives position us to accelerate profitable growth.”

The company also noted that “EBIT excluding non-core items was $114.9 million, or 7.6% of sales, compared to $119.4 million, or 8.3% of sales, in the prior year period,” adding that “the year-over-year decrease in EBIT for the third quarter and the first nine months of 2025 was primarily due to higher SG&A expenses due to negative exchange rate impact, the expansion of DTC operations, additional costs associated with the Passionata brand that was acquired last year as well as higher IT costs mainly due to the implementation of SAP, mostly offset by higher gross margin.”

For the full year 2025, Delta Galil stated it expects sales to be in the range of $2.110 to 2.135 billion compared to actual sales of 2.0457 billion last year, and a profit of $97 to $101 million, compared to actual net income of $108.5 million in 2024. The company explained some of the factors in this prediction: “following recent legislation that went into effect at the end of August 2025 suspending the “de minimis” exemption for shipments imported into the U.S. with a value lower than $800, the company estimates that the legislation will increase the duty impact by approximately $3 million compared to the previous estimate. As a result, the company estimates the suspension of the “de minimis” exemption and previously announce tariffs will reduce operating profit in 2025 by an estimated amount of approximately $25 million.”