• Q3 sales in original currency up 12%
  • Net income falls 2% to $13.4m
  • Gross margin narrows to 29.2%

Israel-based lingerie, sleepwear and sock manufacturer Delta Galil Industries has reaffirmed its full-year guidance as it revealed double-digit third-quarter sales growth led by an increase in activewear products.

Sales in the three months ended 30 September increased 6% to US$284.5m from $267.2m in the same period a year earlier. In original currency, sales grew 12%, while organic sales were up 10%.

Net income, however, fell 2% to $13.4m from $13.8m as a result of investments such as its acquisition of the PJ Salvage brand. Before one-time items, earnings attributed to shareholders were up 2% to $14.1m.

“Looking at the key drivers of our profitable growth this quarter, we saw an increase in sales in Delta USA and in the global upper market segments, while both our Schiesser business in Europe and Delta Israel increased sales in original currency,” said CEO Isaac Dabah. “A rising proportion of our sales now comes from branded products, which has been another of our major strategic initiatives.”

Gross margin narrowed slightly to 29.2% from 30.9% last year. 

Earlier this year, Delta Galil acquired the PJ Salvage brand in a bid to expand its presence in sleepwear and loungewear, attract a millennial customer base, and strengthen its position in the upper market. It also signed a license agreement with Columbia for men’s and ladies’ underwear, and is set to open a new factory in Vietnam in the first half of 2016.

The company reiterated its 2015 financial guidance of sales in the range of $1.08bn to $1.09bn, representing an organic increase of 4%-6%, and earnings in the range of $48.5m to $51.5m, an increase of 0-6% from 2014 net income of $48.4m.