Israeli textile firm Delta Galil Industries Ltd has reported stable sales of $470.1 million in the second quarter (Q2) ended June 30, 2025, despite pressures from US tariffs and the Israel-Iran war. The direct-to-consumer (DTC) sales rose 9 per cent year-over-year (YoY), with own-web sales excluding bare necessities up 29 per cent, marking the company’s tenth consecutive quarter of double-digit digital growth.

The gross profit climbed 2 per cent to $201.3 million, while gross margin increased by 90 basis points to a second quarter record of 42.8 per cent. The YoY increase in Q2 gross margin was due primarily to positive exchange rates, higher DTC sales and favourable segment mix, partially offset by the US tariff impact and a lower export subsidy in its Egyptian operation, Delta Galil said in a press release.

Delta Galil Industries has reported sales of $470.1 million in stable Q2 2025 despite US tariffs and regional tensions.
DTC sales rose 9 per cent, with record gross margin of 42.8 per cent.
Net income slipped to $16.7 million, while H1 sales grew 5 per cent to $968.8 million.
The company cut full-year guidance but expects to offset tariff pressures through strategic sourcing and its Egypt hub.

However, EBIT declined to $31 million from $37.8 million, weighed by higher marketing costs, expansion of DTC operations, and expenses from integrating the Passionata brand.

The net income for the quarter dropped to $16.7 million from $21 million, while diluted earnings per share (EPS) fell to $0.57 from $0.74.

“Delta delivered solid second quarter financial results despite the challenging US tariff environment this year. Despite the tariff impact, second quarter steady sales demonstrate the strength of our diversified global platform including robust growth in our branded direct-to-consumer channels,” said Isaac Dabah, CEO of Delta Galil. “Our record gross margin in this quarter on a backdrop of tariff uncertainty is a true achievement and a testament to the strength and flexibility of our vertical operating model and the agility of our operating team.”

Meanwhile, for the first half (H1) of 2025, Delta Galil posted sales of $968.8 million, a 5 per cent increase from $922.2 million in the prior-year period. DTC sales grew 12 per cent, underscoring the company’s continued shift towards branded channels.

The gross profit in H1 rose to $403.9 million from $387.9 million, though gross margin rose slightly to 41.7 per cent compared with 42.1 per cent a year earlier. EBIT remained broadly flat at $63.7 million, versus $63.8 million last year, while net income edged up to $34.3 million from $33.1 million. Diluted EPS for H1 stood at $1.18, up from $1.13 in the same period prior year.

For full year 2025, Delta revised its guidance downwards due to tariff headwinds. Sales are now expected in the range of $2.11–2.14 billion, EBIT between $171–176 million, net income of $97–101 million, and diluted EPS of $3.32–3.46.

The company projects tariffs could reduce annual operating income by as much as $22 million but aims to mitigate the impact through strategic sourcing and production shifts, particularly leveraging its Egyptian hub, which benefits from low tariff and duty advantages.

“Going forward, we see opportunity to gain market share due to our strategically located hub in Egypt with low tariff and no duty generating increasing demand from strategic customers,” added Dabah. “We are expanding and streamlining factories in strategic locations, enhancing logistics centers, and expanding our store footprint and e-commerce platform globally. We remain confident in our ability to create value for our shareholders in 2025 and beyond.”

Fibre2Fashion News Desk (SG)