Apparel manufacturer Delta Galil Industries Ltd on Wednesday reported a 30 per cent drop in second quarter profit to $3.7 million or $0.20 per share, compared to $5.3 million or $0.29 per share in the same period last year.

The firm, which makes ladies' intimate apparel, socks, men's underwear, baby-wear and leisurewear for Calvin Klein, Hugo Boss, Nike, Ralph Lauren, and Donna Karan, said sales rose 12 per cent to $158.5 million, compared to $141.0 million in the comparable quarter of 2003.

In the first six months of 2004, profit was 38 per cent lower at $7.8 million or $0.41 per share, compared to $12.7 million or $0.68 per share for the same period last year.

First-half sales increased 12 per cent to $310.6 million, compared to $277.9 million last time.

The company said its improved sales were due to growth in the European market, the North American upper market and the Israeli market. It also benefited from the consolidation of Auburn Hosiery Mills, a sock company, which was acquired in the fourth quarter of 2003.

Arnon Tiberg, Delta's CEO, stated: "The decrease in sales to [the US] market in the first half of 2004 was in line with our expectation. We expect an increase in sales to this market, excluding Auburn, in the second half of the year."

He added: "We expect an improvement in this sector in the second half of 2004 as well as a continuation of the positive trend in other divisions."