Delta Galil’s Q3 gross margin rose to 43.3%, marking an increase of 170 basis points from 41.6% in the same period last year.
Its gross profit for the reported quarter ended 30 September grew 7% to $233.2m, compared with $218.3m in 2024.
Delta Galil CEO Isaac Dabah said: “Our third quarter results highlight the strength and resilience of the Company. Despite a challenging macro-economic environment, including tariff-related cost pressures, we increased sales year-over-year and expanded gross margin to a third quarter record of 43.3%.”
Key metrics from Delta Galil’s Q3 results
The company recorded $539m in sales, up 3% from $524.2m in Q3 2024.
DTC sales of Delta Galil’s owned brands were a key driver of the improved profitability, rising 19% in the third quarter compared with the same period last year, underscoring the shift towards higher-margin channels.
The company’s earnings before interest and taxes (EBIT) excluding non-core items were $51.2m, compared with $52.3m. EBIT for the quarter was $49.6m.
Net income dropped 2% to $31.4m over the quarter, from $32.0m a year earlier. Its reported diluted earnings per share for the quarter were $1.10, down from $1.16 ayear ago.
For the first nine months of 2025, sales of Delta Galil were $1.5bn, marking a 4% increase from $1.4bn in the prior-year period.
Gross profit for the nine months grew 5% to $637.1m, compared with $606.2m a year earlier. Gross margin was 42.3%, up from 41.9% in the prior-year period.
Tariffs impacts and guidance
Following US legislation that took effect at the end of August 2025, suspending the “de minimis” exemption for shipments imported into the US valued below $800, the company estimates this change will increase the duty impact by approximately $3m compared to its previous estimate.
In total, the suspension of the “de minimis” exemption and previously announced tariffs are expected to reduce 2025 operating profit by about $25m.
Despite this, Delta Galil reaffirmed its 2025 guidance as provided in its second-quarter 2025 report.
The company expects sales for this year in the range of $2.11bn to $2.13bn, up from $2.04bn in FY24.
EBIT is expected to be between $171m and $176m, which is below FY24 EBIT of $184.1m.
Net income is estimated to be in the range of $97m to $101m, which translates to diluted EPS between $3.32 and $3.46.
“Looking forward towards 2026, we remain focused on innovation, operational excellence, and strategic capital investment, which we believe will deliver sustained value for our customers, partners, and shareholders,” Dabah concluded.
