(Filed Under Financial and General Interest News). Second quarter sales at Delta Galil fell 2.4%, while profits dropped by 16.1%.
For the three months ended June 30, 2016 the company reported net income of $7.811 million on sales of $249.531 million compared to a profit of $9.312 million on sales of $255.537 million during the same period last year.
“While we experienced a challenging U.S. retail environment this quarter,” declared Isaac Dabah, CEO, “this was partially offset by improvements in all of our other business segments and regions, reflecting the strength of our diversified business model. Looking ahead, we are continuing to build our branded business and global footprint by implementing the new acquisition, which we anticipate will be consummated during the third quarter. Importantly, we have a strong balance sheet to support our long-term growth, and we are continuing with our investments aimed at attaining double digit EBIT growth in 2017 and 2018.”
Dabah continued, “As part of our growth strategy, we announced during the quarter the acquisition of contemporary premium brands, including the businesses and brands of 7 For All Mankind, Splendid and Ella Moss from VF Corporation [see separate article and analysis in BODY]. We are now working to maximize the benefits these brands bring to Delta, as they further diversify our product offering and distribution channels, while adding significant strength to our structure.”
“We are on track to launch our new factories in Vietnam, with Seamfree and cut and sew factories opening in the fourth quarter of 2016, and our socks factory in the first quarter of 2017, which will contribute to our growth in 2017 and 2018. With a strong balance sheet to support our long-term growth and acquisition strategy, we are focused on growing our e-commerce business, and are working to attain double digit EBIT growth in 2017 and 2018.”
In a release accompanying the financial results, the company explained the sales decline reflected “softer topline performance in the U.S. market, offset by stronger sales in regions such as Europe and Israel. Sales for the first six months of 2016 were $506.2 million, versus $508.4 million in the same period of 2015.”
Addressing the decline in net profit, the company noted “The decrease for the second quarter and the first half of 2016 derives mainly from higher depreciation expenses and an increase in tax on income expenses compared to the same periods a year ago.” — NM
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