Delta: Sales Steady, Net -20%

An image from the Delta Galil investor site.

Delta Galil second quarter net income slipped 20% to $16.736 million (compared to $21.021 million last year) as sales remained flat at $470.124 million (vs $471.426 million in the three months ended June 30, 2024).

CEO Isaac Dabah stated that “despite the tariff impact, second quarter steady sales demonstrate the strength of our diversified, global platform including robust growth in our branded direct-to-consumer channels. Our record gross margin in this quarter on a backdrop of tariff uncertainty is a true achievement and a testament to the strength and flexibility of our vertical operating model and the agility of our operating team. Going forward, we see opportunity to gain market share due to our strategically located hub in Egypt with low tariff and no duty generating increasing demand from strategic customers.”

Delta revealed that DTC sales of the “company’s owned brands increased 9% and 12% in the second quarter and the first half of 2025, respectively, compared to the same periods last year,” adding that “own-web sales (excluding Bare Necessities) increased 29%, representing the 10th consecutive quarter of double-digit growth,” in the second quarter.

Delta Galil lowered its full year financial guidance, predicting that sales will now range between $2.110 billion and $2.135 billion, compared to earlier expectations of $2.118 billion to $2.165 billion. The company is also expecting lower full year net income, which will range between $97 million and $101 million, compared to an earlier prediction of profits of $112 million to $118 million. It explained that “The company is working to offset the effects of tariffs by strategically optimizing its sourcing and production to countries with lower exposure to tariffs. In addition, the company is working with its vendors and customers to minimize the tariffs’ impact. The company estimates that based on current tariff rates, the potential impact on 2025 annual operating income will not exceed $22 million.”

CEO Dabah, concluded: “our robust balance sheet remains a competitive advantage, providing Delta with the flexibility to invest in our facilities, operations and multi-year growth initiatives. We are expanding and streamlining factories in strategic locations, enhancing logistics centers, and expanding our store footprint and e-commerce platform globally. We remain confident in our ability to create value for our shareholders in 2025 and beyond.”