Israels' Delta Galil's sales up by 13% YoY to $524.2 mn in Q3 2024

The gross margin of the company in Q3 2024 stood at 41.6 per cent, up 70 basis points. Its EBIT increased 13 per cent to reach $52.3 million, or 10.0 per cent of sales. The net income increased by 9 per cent YoY to $32.0 million, or 6.1 per cent of sales, and diluted earnings per share (EPS) increased 6 per cent to $1.16, Delta Galil said in a press release.

The operating cash flow, excluding international financial reporting standard (IFRS) 16 increased 23 per cent to $37.2 million. The company had a strong balance sheet with $108.2 million in cash and record shareholders’ equity of $797.8 million. Net debt, excluding IFRS 16, declined 9 per cent to $162.5 million, compared to $178.0 million on September 30, 2023.

“Record top-line results were driven by growth across all channels including record third quarter DTC sales. In addition, we have produced five consecutive quarters of record gross margin reflecting the continued success of the strategies we are pursuing to enhance our operating efficiencies and realign our manufacturing capabilities,” said Isaac Dabah, chief executive officer (CEO) of Delta Galil.

“I am encouraged by the strong operating and financial results we have achieved through the first nine months of 2024. This is a testament to the diversified business model we have developed, the strategies we are pursuing and the talent of our global workforce. During the third quarter, we published our 2023 ESG report highlighting our commitment to a greener, inclusive, and ethical world. We also announced a strategic partnership with Reliance Retail Ventures, the largest retail company in India that is aimed at driving growth and introducing our legacy of innovation within the intimate apparel sector to the Indian market,” added Dabah.

Nine-month (9M) financials

Sales for the nine-month (9M) period of 2024 were $1,446.4 million, an increase of 7 per cent from $1,349.1 million in the prior-year period. The company reported a record third quarter gross margin of 41.6 per cent as compared to 40.9 per cent for the same period last year. The 70-basis point expansion was due primarily to higher volume and improved efficiency of our factories as well as a more favourable channel mix.

The gross margin in the 9M 2024 increased by 180-basis points to 41.9 per cent, compared to 40.1 per cent in the prior-year period. EBIT in this period was $116.1 million, or 8.0 per cent of sales, compared to $88.8 million, or 6.6 per cent of sales in the same period last year.

Net income of the company increased 37 per cent to $65.1 million, compared to $47.6 million last year and diluted EPS in the 9M 2024 was $2.29, compared to $1.71 in the same period last year.

EBITDA, excluding IFRS 16, was $144.7 million, compared to $119.7 million in the 9M 2023. Cash flow generated from operating activities, excluding IFRS 16, was $88.8 million, compared to $99.6 million in 9M 2023. The year-over-year reduction in nine-month operating cash flow was primarily attributable to changes in working capital, mainly inventory, to support expected sales growth and new product launches, said the press release.

The company, for the full year 2024, projects sales in the range of $1,991.0-$2,031.0 million, compared to $1,857.7 million in 2023. EBIT is expected between $173.0 million and $183.0 million, up from $153.0 million last year. EBITDA projected to range between $266.3 million and $276.3 million, improving from $246.8 million in 2023. Net income is anticipated to grow to $106.9-$114.7 million, compared to $91.6 million in the prior year, with diluted EPS ranging from $3.82-$4.11, up from $3.25 in 2023.

Fibre2Fashion News Desk (SG)