Israeli textile group Delta Galil Industries Ltd had a successful start to the 2025 financial year. In the first quarter, the company, whose portfolio also includes the German lingerie brand Schiesser, achieved record sales and significantly higher profits, Delta Galil announced on Thursday. Despite the positive development, the group faces new challenges due to changes in US trade policy.
In the three months to March 31, sales amounted to 498.7 million dollars. Delta Galil exceeded the previous year's level by 11 percent, a new record for the first quarter. According to the company, growth in all segments and sales channels, plus a strong increase of 21 percent in online sales of its own brands, contributed to this success.
Delta Galil increases profit despite lower margin
However, the gross margin in the first quarter was 40.6 percent, below the previous year's figure of 42.3 percent. The group explained that the decline was mainly due to increased freight costs, unfavourable exchange rates and lower export subsidies in Egypt. Nevertheless, thanks to higher sales and strict cost discipline, Delta Galil was able to increase its operating profit (EBIT) by 26 percent to 32.7 million dollars. Adjusted for special effects, the EBIT was also 32.7 million dollars, an increase of 11 percent compared to the previous year. Net profit increased by a remarkable 46 percent to 17.6 million dollars in the first quarter.
Despite all the successes, the group withdrew its forecast for the year as a whole, which had been announced in the annual report, due to new US tariffs on imports and the associated uncertainties. Delta Galil is working to cushion the impact through optimised production and procurement strategies, as well as cost savings of between 5 million and 7 million dollars. The group estimates the maximum burden on operating profit from the current tariffs at up to 20 million dollars.
“We are well positioned to grow and gain market share even in a challenging economic environment,” emphasised chief executive officer (CEO) Isaac Dabah. The company's geographically diversified production sites offer strategic advantages in the face of trade barriers. Dabah also reaffirmed the long-term goal of creating added value for customers and shareholders through innovation, sustainability and strong brands.
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