• Q2 earnings including acquisition-related costs were down 28% to US$6.4m.
  • Sales of $338.9m for the quarter were relatively flat from the year ago period.
  • Delta Galil said it experienced challenges in the second quarter, but these were partially offset by improvements in several business segments and regions.

Israeli apparel major Delta Galil Industries has reaffirmed its full year outlook, despite booking a drop in earnings and relatively flat sales in its second quarter.

For the three months to the end of June, earnings including acquisition-related costs were down 28% to US$6.4m. Delta Galil bought French premium undergarment maker Eminence Group in May last year, with the deal completing earlier than expected last month.

Excluding acquisition costs, earnings edged up 2% to $9.1m. For the six-month period, earnings including costs were down 4% to $13.9m.

The company reported sales of $338.9m for the quarter, relatively flat from $340.5m in the year ago period. Sales for the first six months of 2018 were $673.4m, up 3%.

Delta Galil said it experienced challenges in the second quarter, but these were partially offset by improvements in several business segments and regions.

"We are very pleased with the early completion of the Eminence Group acquisition, and believe it provides a potential platform for growth, while expanding our presence and branded business in the important France and Italy markets," said CEO Isaac Dabah. "We remain committed to investing in new products and resources to drive sustained profitable growth and long-term shareholder value. And with a strong balance sheet and cash position, we have the necessary financial resources to continue to invest, innovate and grow – both organically and through acquisitions."

For the full year, the company is forecasting net income in the range of $54m-$59m, representing an increase of 7%-16%, and sales of between $1.4bn-$1.44bn, representing an increase of 2%-5%.

Delta Galil develops innovative seamless apparel including bras, shapewear and socks; intimate apparel for women; underwear for men; babywear, activewear, sleepwear and leisurewear. The company also designs, develops, markets and sells branded denim apparel under the brand 7 For All Mankind, and ladies' apparel under the brands Splendid and Ella Moss.