Delta Galil lowers full-year financial guidance amid tariff concerns

Delta Galil Industries, a global designer and manufacturer of branded and private-label apparel, has reported its financial results for the second quarter ended June 30, 2025. The company's sales for the quarter remained stable at 470.1 million dollars, consistent with the previous year's quarter. For the first half of 2025, sales increased by 5 percent to 968.8 million dollars.

Looking ahead, the company has lowered its financial guidance for the full year, projecting sales between 2.11 billion dollars and 2.135 billion dollars and diluted earnings per share (EPS) between 3.32 dollars and 3.46 dollars.

The company's gross profit increased by 2 percent to 201.3 million dollars in the second quarter, leading to a gross margin of 42.8 percent. According to CEO Isaac Dabah, this achievement is a "testament to the strength and flexibility" of the company's vertical operating model. The gross margin growth was driven primarily by positive exchange rates, higher direct-to-consumer (DTC) sales, and a favourable segment mix, despite being partially offset by U.S. tariff impacts. The company's own-brand web sales saw a 29 percent increase, marking the tenth consecutive quarter of double-digit growth.

Despite the stable sales and record gross margin, the company's EBIT was 31 million dollars, a decrease from 37.8 million dollars in the second quarter of 2024, which was primarily due to higher selling and marketing expenses. Net income for the quarter dropped to 16.7 million dollars, for the first half of the year, however, net income rose to 34.3 million dollars versus last year.

The company is actively working to mitigate the impact of tariffs by strategically optimising its sourcing and production, particularly at its hub in Egypt, which offers low-tariff and duty-free benefits to strategic customers.