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Delta Galil net income up 2% in Q2FY18

Aug '18
Courtesy: Delta Galil
Courtesy: Delta Galil
The net income of Delta Galil excluding the acquisition-related costs has increased 2 per cent to $9.1 million in the second quarter of fiscal 2018, from $8.9 million in the second quarter of 2017. Net income was $6.5 million for the second quarter of 2018, including the acquisition-related costs, down 27 per cent from $8.9 million last year.

The company reported sales of $338.9 million for the second quarter of 2018, relatively flat from $340.5 million in the second quarter of 2017. Sales for the first six months of 2018 were $673.4 million, up 3 per cent from $656.1 million in the same six-month period of 2017.

"While we experienced challenges in our second quarter, they were partially offset by improvements in several business segments and regions, demonstrating the strength of our diversified business model. We have a strong balance sheet in place, and through our blend of branded and private label products, an expanding global presence, and a range of market segments, we remain positioned for long-term profitable growth," Isaac Dabah, CEO of Delta Galil said.

Operating profit before one-time items was $15.2 million for the second quarter of 2018, compared to $17.7 million in the second quarter of 2017, representing a 14 per cent decrease. Operating profit was $11.3 million for the second quarter of 2018, including $4 million acquisition-related costs, compared to $17.7 million for the same period last year, representing a 36 per cent decrease.

"We were very pleased with the early completion of the Eminence Group acquisition, as it adds a men’s premium French brand, while expanding our business in France and Italy, where we currently lack significant market share. The acquisition was financed using Euro bank loans at an attractive interest rate. We will consolidate Eminence Group results beginning in the third quarter," added Dabah.

For fiscal 2018, the sales are expected to range between $1,400 million-$1,440 million, representing an increase of 2-5 per cent from 2017 actual sales of $1,368.1 million. EBIT is likely to range between $91 million-$96 million, representing an increase of 4-10 per cent from 2017 actual EBIT of $87.4 million.

"Looking ahead, we expect the investments we made in our manufacturing facilities to start having positive impacts on our bottom line towards the second half of 2019. We are also excited about designer/influencer collections in Delta Galil Premium Brands, possible initiatives with online retailers, and the ability to introduce core Delta products through the Eminence distribution channels. With a strong balance sheet and cash position, we have the necessary financial resources to continue to invest, innovate and grow – both organically and through acquisitions," he concluded. (RR)

Fibre2Fashion News Desk – India

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