Delta Galil turned last year’s second-quarter loss back into a profit, as e-commerce pushed sales up 68 percent in the period.
In a Nutshell: Delta Galil Industries, a global manufacturer and marketer of branded and private-label apparel products, raised its 2021 financial guidance, excluding non-core items and based on current market conditions and assuming there is no resurgence of the Covid-19 pandemic that leads to quarantines or lockdowns in any countries in which the company sells or manufactures its products.
Full-year 2021 sales are now expected to range between $1.83 billion and $1.88 billion, representing an increase of 3 percent compared to prior guidance and up 8 percent to 11 percent from 2019 sales of $1.69 billion.
Full-year 2021 net income is expected to range between $96 million and $104 million, representing an increase of 17 percent compared to prior guidance and up 59 percent to 73 percent from 2019 actual net income of $60.2 million. Full-year 2021 earnings before interest and taxes (EBIT) is expected to range between $160 million and $170 million, representing an increase of 14 percent compared to prior guidance and up 51 percent to 60 percent from 2019 actual EBIT of $106 million.
Full-year 2021 diluted earnings per share (EPS) is expected to range between $3.40 and $3.70, which would be a gain of 15 percent compared to prior guidance and up 44 percent to 57 percent from 2019 actual EPS of $2.36.
Sales: Sales for the second quarter ended June 30 increased 68 percent to $455.8 million. Excluding the sales of Bare Necessities, which was acquired in October 2020, sales increased by 56 percent in the second quarter compared to the same periods last year. Growth also was seen across all geographic regions.
Second-quarter e-commerce sales on the company’s own website rose 97 percent to $63.3 million year over year.
Earnings: Net income for the second quarter was $27.3 million compared to a net loss of $53.3 million for the second quarter of 2020. EBIT for the second quarter increased $97.8 million to $42.4 million from a loss of $55.4 million in the year-ago period.
CEO’s Take: Isaac Dabah, CEO of Delta Galil, said: “We are very pleased with our performance this quarter, which now marks four consecutive quarters of record operating margin and three consecutive quarters of record gross margin, including achieving the highest ever gross margin of 41.1 percent in this quarter. We remain focused on our commitment to digital innovation and recently announced the strategic merger of our Bare Necessities and Brayola business units to create the largest intimates marketplace for women.”
“We also recently signed new global license agreements with Adidas and Wolford, and we are excited by the growth opportunities ahead of us,” Dabah added. “Our operating cash flow continues to be strong, enabling us to reduce our debt to the lowest level in the last five years. With our strong balance sheet, we have the necessary resources to deliver continued innovation and growth.”