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May 17, 2022

Delta Galil reaffirms FY outlook on record Q1 sales

Israel-based apparel manufacturer Delta Galil has cited a strong start to 2022 with record financial results for the first quarter.

By Beth Wright

Reporting results for the three months to 31 March, Delta Galil reaffirmed its full-year outlook as first-quarter sales reached record levels for the fifth consecutive quarter, increasing 16% to US$483.9m from $416.1m in the prior-year period.

Owned e-commerce website sales declined 22% in the quarter to $54.9m, compared to $70.8m in the first quarter of 2021. The decrease was primarily due to a decline in web traffic as customers shifted back to stores.

Net income, meanwhile, increased by more than a quarter on the same period a year ago, rising 26% to $18.9m from $15.1m last time. Gross margins narrowed to 37.9% of sales from 38.2% a year prior, due mainly to increased freight and raw material costs, partially offset by a favourable shift in customer mix and increased profitability of the company’s factories.

“We are pleased with our strong first-quarter results, which marked five consecutive quarters of record quarter revenue and seven consecutive quarters of record quarter operating margins. We delivered record quarterly EBIT and net income, driven by higher sales across all geographic regions, successful execution of our innovation-driven growth strategy, and benefits from operating leverage. We maintained strong gross margins despite rising freight and production costs,” said Isaac Dabah, CEO of Delta Galil.

“Looking ahead, our profitable growth trajectory, strong balance sheet and global workforce position us to meet our customers’ growing demands, while effectively managing our cost structure.”

Delta Galil reaffirmed its full-year 2022 earnings outlook, reflecting double-digit growth in sales and profitability.

Full-year 2022 sales are expected to range between $2.08bn and $2.14bn, representing an increase of 7- 9% compared to 2021 sales of $1.95bn, while net income for the period is forecast at between $138-$145m, representing an increase of 11-17% compared to 2021 net income of $124.2m.

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