In the three months ended 30 September, Delta Galil reported an 11% increase in earnings to US$36.1m from $32.5m a year earlier.

Sales reached $512m, increasing 2% on sales of $501.1m last year. In constant currency, sales increased across all geographies in the quarter.

Ecommerce sales on the company’s own websites, however, amounted to $49m, representing a 7% drop on the prior year. The decline followed a shift in consumer behaviour back to physical retail stores after Covid-19 related lockdowns, Delta Galil said.

Isaac Dabah, CEO of Delta Galil, said: “We are pleased to report another quarter of record sales and EBIT—particularly given current challenging economic conditions. Demonstrating the continued strength of our diversified business model, our results were driven by sales growth in constant currency in the Private Label, 7 For All Mankind and Delta Israel segments, while sales in our Brands segment and Other—which mainly includes the results of Bare Necessities—were negatively impacted by global demand headwinds, changes in foreign currency exchange rates, and inflation pressures.”

The company said it has already begun integrating its recently-acquired sustainable underwear brand Organic Basics, and plans to grow the business globally and into new categories in the second quarter of 2023.

“We continue to strengthen our digital expertise, while we strategically expand our businesses in order to best position us to develop the most innovative, high-quality products for our customers worldwide,” Dabah continued.

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“As the retail industry continues to face a difficult economic environment, we believe that Delta Galil’s strong value proposition, diversified business model and reputation for innovation will enable us to successfully navigate challenging market conditions.”

Delta Galil lowered its outlook for the full year to reflect increased negative impacts from foreign currency fluctuations as well as heightened inventory levels and increased promotional activity in the marketplace.

The company is forecasting sales of between $2.02bn- $2.03bn from previous guidance of $2.08m-$2.108m, and net income of $119m-$121m from previous guidance of $138m- $145m.