Delta Galil reaffirms full-year outlook despite increased tariff impact

Delta Galil Industries Ltd., the global apparel manufacturer and marketer, reported third-quarter 2025 results that reflected steady top-line growth, expanding margins, and continued momentum in its direct-to-consumer (DTC) channels despite ongoing tariff and macroeconomic headwinds.

Third-quarter sales rose 3 percent to 539 million dollars, while own-web revenue excluding Bare Necessities surged 20 percent—marking the company’s eleventh consecutive quarter of double-digit growth.

The company noted that recent U.S. legislation suspending the “de minimis” exemption for imports under 800 dollars will increase its duty impact by approximately 3 million dollars, contributing to an estimated 25 million dollars reduction in operating profit for 2025 due to combined tariff effects. Despite this, Delta Galil reaffirmed its full-year 2025 outlook

CEO Isaac Dabah said the results underscore the company’s “strength and resilience” amid tariff pressures, noting that direct-to-consumer sales rose 19 percent in the quarter and continued to boost margins. “We continued to make strategic investments in our factories and distribution centers to improve efficiencies, while simultaneously expanding our retail locations in Germany and Israel,” Dabah said. “Looking toward 2026, we remain focused on innovation, operational excellence and strategic capital investment.”

Gross profit reached a third-quarter record of 233.2 million dollars, up 7 percent year-on-year, lifting gross margin to 43.3 percent from 41.6 percent. EBIT excluding non-core items was 51.2 million dollars, slightly below last year due to higher SG&A costs linked to currency movements, DTC expansion, the Passionata brand integration and SAP implementation. Net income excluding non-core items increased 2 percent to 32.8 million dollars.

For the first nine months of 2025, sales increased 4 percent to 1.51 billion dollars and gross profit rose 5 percent to 637.1 million dollars, with gross margin improving to 42.3 percent. EBIT excluding non-core items was 114.9 million dollars, compared with 119.4 million dollars last year, while net income for the nine-month period was 65.7 million dollars, slightly above the prior year. Diluted EPS excluding non-core items was 1.15 dollars for the quarter and 2.33 dollars for the nine-month period.

For the fiscal year 2025, the company continues to expect sales in the range of 2,110 to 2,135 million dollars, EBIT between 171 to 176 million dollars, EBITDA in the range of 275 to 279 million dollars and net income in the range of 97 to 101 million dollars or 3.32 to 3.46 dollars per diluted share.

Delta Galil’s customer base includes many of the world’s leading retailers and brands, among them Calvin Klein, Nike, Victoria’s Secret, Lululemon, Skims and Walmart. The company also owns a broad portfolio of brands such as Delta, Schiesser, Eminence, Athena, Splendid and PJ Salvage, and markets products under licensing agreements for major global names including Adidas, Columbia, Calvin Klein and Tommy Hilfiger. In addition, Delta Galil designs, develops, markets and sells jeans and outerwear under the Seven for All Mankind brand.