Israel's Delta Galil posts net sales of $463 mn for Q3 FY23

Remarkably, the company achieved a record gross margin of 40.9 per cent in the third quarter, improving by 250 basis points. This improvement in profitability indicates effective cost management and pricing strategies, the company said in a press release.

The company's earnings before interest and taxes (EBIT) were $46.1 million, representing 10 per cent of sales. This figure is slightly down from last year's $55.1 million, or 10.8 per cent of sales. Similarly, earnings before interest, taxes, depreciation, and amortisation (EBITDA), excluding the impact of IFRS 16, reached $53.2 million. This amount is a 16.7 per cent decrease from last year but a substantial 40 per cent increase from the second quarter of FY23.

Delta Galil also reported diluted earnings per share in the third quarter of 2023 at $1.09, a decrease from $1.32 in the same quarter of the previous year.

In a positive development, the company's inventory levels continued to decrease for the fourth consecutive quarter, showing a significant aggregate reduction of $114.4 million since September 30, 2022.

The first nine months of FY23 also saw a downward trend in sales, which were $1,349.1 million, a 9 per cent decrease (8 per cent in constant currency) from $1,487.1 million in the prior-year period. However, gross margin in these nine months increased by 180 basis points to 40.1 per cent, up from 38.3 per cent in the same period of 2022. EBIT for the nine months stood at $88.8 million, a decline from $127.8 million in the same period last year. Net income also saw a reduction, coming in at $47.6 million compared to $77.7 million in the previous year.

“During the third quarter, we made strong progress executing against previously disclosed strategies aimed at reducing inventory levels, expanding gross margin, and generating strong operating cash flow. In addition, we achieved a strong, double digit EBIT margin, despite lower sales and selling, general, and administrative expense deleverage due to our record third quarter gross margin and the benefits of our previously implemented cost efficiency efforts. This strong financial position provides us with significant flexibility to further invest in our brands, support our customers, and pursue long-term growth opportunities,” said Isaac Dabah, CEO of Delta Galil.

Fibre2Fashion News Desk (DP)