(Filed Under Financial and General Interest News). Delta Galil’s bold purchase in 2016 of the brands 7 For All Mankind, Splendid and Ella Moss seems to be working out for the company. Sales at Delta Galil increased 31% in the fourth quarter of 2016, while net income rose 51%. For all of last year, sales jumped 9% and profits rose 18%.
“During the year, we made the successful acquisition of 7 For All Mankind, Splendid and Ella Moss, reflecting our strategic efforts to grow Delta Galil’s branded business and expand our global footprint,” declared CEO Isaac Dabah. “These brands further diversify our product offering and distribution channels, while adding significant strength to our structure.”
By the numbers, Delta reported net income in 2016 of $51,902,000 on sales of $1,179,167,000 compared to $43,948,000 on sales of $1,079,987,000 in 2015.
For the three months ended December 31, 2016, the company reported net income of $18,547,000 on sales of $376,315,000 compared to earnings of $12,273,000 on sales of $287,056,000 for the last three months of 2015.
“We are very pleased with our results for 2016, which concluded with a particularly strong fourth quarter and reflected all-time high sales, operating profit and cash flow. Our diverse blend of business segments, product categories and an expanded global presence, along with our strategic efforts to grow in areas such as branded products, continue to drive both growth momentum and balance. We remain committed to investing in new products and resources to drive sustained profitable growth and long-term shareholder value, and are focused on attaining overall double digit EBITDA growth in 2017 and beyond.”
Listing other achievements during the last year, Dabah said, “We’ve upgraded our digital platform and increased our ecommerce market share by selling to wholesale customers such as Amazon, Zalando, and Otto, while elevating sales on our proprietary Schiesser and Delta Israel websites. We also launched a new advanced digital platform for the 7 For All Mankind, Splendid and Ella Moss brands.”
“Looking ahead, we remain committed to investing in new products and resources to drive sustained profitable growth and long-term shareholder value and, with a strong balance sheet and cash position, we have the necessary financial resources to continue to invest, innovate and grow.
Delta’s purchase of 7 For all Mankind, Splendid and Ella Moss last year, brands focused on sportswear, jeans and other apparel, has created a broader mix of apparel products and less of an overall concentration on intimates and underwear.
An investor presentation supplied by the company pointed to other significant shifts at Delta. For example, in the fourth quarter of 2016 the company’s branded business made up 72% of its total and private label 28%, while in the same quarter in 2015, the branded business was only 57% of the total and private label 43%.
In the fourth quarter of 2016, the U.S. represented 55% of the company’s sales, while it made up 53% of sales in the same quarter a year earlier. Similarly, “upper tier” apparel made up 54% of sales in the 2016 fourth quarter compared to 47% in the 2015 fourth quarter.
Looking ahead at the full year 2017, the company predicted total sales will range between $1.33 billion and $1.37 billion (representing 13% to 16% growth from last year), and said it was expecting net income to range between $50 and $52 million (a 6% to 10% increase over 2016). — NM
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