Delta Galil sales reached $498.67m in Q1 ended 31 March 2025, up from $450.78m in the corresponding quarter of the previous year.
However, due to the ongoing unpredictability of tariffs the company decided to retract its previously issued financial guidance. It said the forecast presented in its Annual Report for 2024 did not consider the newly implemented US import tariffs.
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Delta Galil’s strategic plan in response to US tariffs
- Working in conjunction with vendors and customers to distribute the cost implications
- Using its extensive international network of production facilities and partnerships
- Shifting manufacturing operations away from China
- Intensifying efforts to expand market share through an increased presence in Egypt, leveraging the country’s lower tariff rates.
The company also forecasts a potential increase in retail prices during the second half of 2025 as tariff-related expenses are passed along throughout the supply chain.
Moreover, it is expediting its cost-reduction initiatives with an aim to realise savings between $5m and $7m.
Delta Galil has also indicated that approximately 30% of its current revenue is subject to the effects of US tariffs. It anticipates the impact of these tariffs will not surpass $20m in 2025.
Delta Galil Q1 2025 highlights
The first quarter saw a 21% rise in online sales for Delta Galil’s proprietary brands.
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By GlobalDataDelta Galil CEO Isaac Dabah said: “Delta delivered record first quarter sales, reflecting strong momentum across all segments and retail channels. Our top-line performance underscores our efforts to fuel the growth of our brands and partners through exceptional design and a relentless focus on innovation, quality and sustainability.”
In the first quarter, Delta Galil’s gross profit was $202.59m, a 6% increase from $190.49m in the first quarter of 2024.
However, gross margin declined to 40.6% from 42.3% in the same period last year, with higher freight costs, foreign currency exchange rates impacting by 90 basis points, and reduced export subsidies in Egyptian operations contributing to this decrease.
Delta Galil’s earnings before and taxes (EBIT) for the first quarter stood at $32.68m, marking a 26% increase from $25.99m in the previous year’s first quarter. The EBIT before non-core items also rose by 11% to $32.68m from $29.35m year-over-year. This increase was mainly due to higher sales volumes and controlled operating expenses.
Net income for Delta Galil also surged by 46% to $17.60m compared to $12.05m in the same period last year. Excluding non-core items after tax adjustments, net income for the first quarter increased by 22% to $17.60m from $14.49m in the first quarter of 2024.
Diluted earnings per share (EPS) experienced a significant boost of 56%, reaching $0.62 compared to $0.39 in the prior year’s first quarter. EPS excluding non-core items after tax went up by 26% to $0.62 in comparison to $0.49 in the first quarter of 2024.
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for Delta Galil, excluding IFRS 16 impacts, rose by 7% to $40.5m in comparison to $37.7m in the first quarter of the previous year.
In February, Delta Galil said it expected a sales increase between 4% to 6% and net income to grow by 4%-9%, potentially hitting between $112m and $118m. Diluted EPS was forecasted to land between $3.92 and $4.15.
