Delta Galil Reports Strong Fourth Quarter and Full Year 2024 Results

CAESAREA, Israel--(BUSINESS WIRE)--Delta Galil Industries, Ltd. (DELG/Tel Aviv Stock Exchange), the global designer, manufacturer and marketer of branded and private label intimate, activewear, loungewear and denim apparel for ladies, men, and children, today reported financial results for the fourth quarter and year ended December 31, 2024.

• Fourth quarter sales increased 18% to $599.2 million, driven by growth in all segments, channels and geographics
• Full year sales increased 10% to a record $2,045.7 million
• Fourth quarter and full year online sales of the Company's brands increased 22% and 21%, respectively
• Full year gross margin improved 100 basis points for an annual record of 41.9%
• Fourth quarter EBIT before non-core items increased 15% and reached $64.7 million, compared to $56.2 million, for the fourth quarter last year
• Full year EBIT before non-core items was $184.1 million, or 9.0% of sales compared to $153.0 million, or 8.2% of sales, last year
• Net Debt to EBITDA, excluding IFRS 16, was 0.6x for the year ended December 31, 2024, compared to 0.7x last year
• Strong Balance sheet with $121.8 million in cash and record shareholders' equity of $803.6 million at December 31, 2024
• Declares a $10 million dividend for the fourth quarter 2024, compared to $9 million for the fourth quarter last year

Isaac Dabah, CEO of Delta Galil, stated, "Delta's strong fourth quarter financial results produced a record year of sales and robust profitability, reflecting our team's resilience, creativity, and dedication inachieving excellent results. For the full year, I am proud to report that we exceeded our 2024 sales and EBITDA guidance, as we grew sales by 10% to over $2.0 billion, produced a record gross margin of 41.9% and expanded net income by 18% to $109 million. This performance generated strong operating cash flow excluding IFRS 16 of $153 million for the full year 2024. Strong profitability and operating cash flow also allowed us to return a record $33 million of dividends back to our shareholders, a 24% increase over the prior year."

Mr. Dabah added, "We expect continued growth in sales and profitability in 2025. Our positive outlook demonstrates the success of the multi-year growth strategies we are pursuing with our strategic partners, as well with our brands, the investments we have made to enhance profitability and drive efficiencies in our factories, and the actions we have taken to improve our balance sheet. Looking ahead, our near-term priorities include increasing sales and profitability with our global licenses and new brands, implementing further realignment plans to improve the efficiency and profitability of our factories, and developing new categories with our main customers. We believe this positive momentum will support our business in 2025, as we look to increase sales, expand margins, and enhance our position as a leader in the global intimates and activewear market."

Sales

The Company reported record fourth quarter 2024 sales of $599.2 million, an 18% increase from $508.6 million in the fourth quarter of 2023.

Sales for the 2024 full year were $2,045.7 million, a 10% increase from $1,857.7 million in the prior-year period.

Gross Margin
Gross profit in the fourth quarter amounted to $250.1 million compared to $219.1 million in Q4 2023.

Gross profit in 2024 amounted to $856.3 million compared to $760.6 million in 2023.

Gross margin in the fourth quarter of 2024 was 41.7% compared to 43.1% for the same period last year. The year-over-year reduction in the fourth quarter gross margin was due primarily to higher freight costs, lower tax rebates in our Egyptian operations and segment mix.

Gross margin for the 2024 full year increased by 100-basis points to a record 41.9%, compared to 40.9% in the prior-year period. The year-over-year gross margin increase was due primarily to higher volume production in the Company's factories due to an increase in Private Label segment sales, and an increase in more profitable DTC sales, partially offset by higher freight costs.

EBIT

EBIT before non-core items in the fourth quarter of 2024 was $64.7 million, or 10.8% of sales, compared to $56.2 million, or 11.0% of sales, in the same period last year.

EBIT in the fourth quarter of 2024 was $53.1 million, compared to $56.2 million, in the fourth quarter last year.

EBIT before non-core items in the full year 2024 was $184.1 million, or 9.0% of sales, compared to $153.0 million, or 8.2% of sales, in the full year 2023.

EBIT in the full year 2024 was $169.2 million, compared to $144.9 million in 2023.

The year-over-year increase in annual EBIT was due to higher sales and improved gross margin.

Non-Core Items

For the fourth quarter of 2024, the Company recorded non-core expenses associated with realignment plans of $6.2 million and expenses related to impairment of non-financial assets of $5.3 million. The Company recorded no non-core items in the fourth quarter of 2023.

In 2024, expenses associated with realignment plans were $9.6 million and expenses related to impairment of non-financial assets were $5.3 million, compared to $11.4 million of expenses related to realignment plans, a $4.0 benefit from the change in the fair value of an earn-out liability, and $0.7 million of deal costs in 2023.

Net Income

Net income excluding non-core items, net of tax in the fourth quarter of 2024, increased 8% to $41.0 million, compared to $37.8 million in the fourth quarter of 2023.

Net income in the fourth quarter of 2024 was $29.5 million, compared to $37.8 million in the same period last year.

Net income excluding non-core items, net of tax, in the full year 2024 increased 18% to $108.5 million, compared to $91.6 million in 2023.

Net income in the full year 2024 increased 11% to $94.6 million, compared to $85.3 million in 2023.

Diluted Earnings Per Share

Diluted earnings per share, excluding non-core items, net of tax, increased 9% to $1.43 in the fourth quarter of 2024 compared to $1.31 in the fourth quarter of 2023.

Diluted earnings per share in the fourth quarter of 2024 were $1.00, compared to $1.31 in the fourth quarter last year.

Diluted earnings per share, excluding non-core items, net of tax, increased 18% to $3.82 in the full year 2024 compared to $3.25 in the same period of 2023.

Diluted earnings per share in full year 2024 were $3.29 compared to $3.02 in 2023.

EBITDA, Cash Flow, Net Debt, Equity, and Dividend

EBITDA, excluding IFRS 16, in the fourth quarter of 2024 increased 15% to $72.4 million, compared to $62.9 million in the fourth quarter of 2023. In the full year 2024, EBITDA, excluding IFRS 16, increased 19% to $217.1 million, compared to $182.6 million in the full year 2023.

Cash flow generated from operating activities, excluding IFRS 16, was $64.3 million, compared to $82.3 million in the fourth quarter of 2023. Cash flow generated from operating activities, excluding IFRS 16, was $153.1 million in the full year 2024, compared to $181.9 million in the full year 2023. The year-over-year reduction in full-year operating cash flow was primarily attributable to changes in working capital, mainly inventory, to support expected sales growth and new product launches, compared to a deliberate decrease in inventory last year, which resulted from a slowdown in the acquisition of new inventory and the sale of inventory from previous seasons.

Net financial debt, excluding IFRS 16, at December 31, 2024, remained at a similar level at $126.5 million, compared to $123.4 million at December 31, 2023.

Equity on December 31, 2024, was a record of $803.6 million, up 5% from $768.4 million on December 31, 2023.

Delta Galil declared a dividend of $10 million, or $0.384 per share, which will be distributed on February 26, 2025, with a record and "ex-dividend" date of February 19, 2025.

2025 Financial Guidance

	2024 Results (in millions, except per share amount)		Full Year 2025 Guidance (in millions, except per share amount)		Increase in 2025 vs 2024
Sales	$2,045.7		$2,118 - 2,165		4%-6%
EBIT	$184.1		$192 - 200		4%-9%
EBITDA	$279.9		$293 - 301		5%-8%
Net income	$108.5		$112 - 118		4%-9%
Diluted EPS ($)	$3.82		$3.92 - 4.15		3%-9%

The Company's guidance excludes non-core items, includes IFRS 16, and is based on 1.05 US $ per 1 Euro and 3.60 NIS per 1 US $.

These forward-looking statements are based largely on the expectations of the Company and are subject to uncertainties including macroeconomic trends. Actual results may differ materially from those included in the guidance as a result of risks and uncertainties which cannot be fully predicted. There is no certainty that the aforementioned conditions will occur, and actual results may be significantly different from those forecasted or implied above.

Constant Currency - Excluding the Impact of Foreign Currency
This release refers to "reported" amounts in accordance with IFRS accounting principles ("GAAP"), which include translation and transactional impacts from foreign currency exchange rates. The release also refers to "constant dollar" amounts, which exclude the impact of translating foreign currencies into U.S. dollars, and are considered a non-GAAP financial measure. These constant currency performance measures should be viewed in addition to, and not in lieu of, or superior to, Delta Galil's operating performance measures calculated in accordance with GAAP.

About Delta Galil Industries
Delta Galil Industries is a global designer, manufacturer and marketer of branded and private label apparel products for men, women and children. Since its inception in 1975, the Company has continually endeavored to create products that follow a body-before-fabric philosophy, placing equal emphasis on comfort, aesthetics and quality. Delta Galil develops innovative seamless apparel including bras, shapewear and socks; intimate apparel for women; underwear for men including under its owned brands Schiesser, Eminence, Organic Basics, and Athena; babywear, activewear, sleepwear, and loungewear including under its owned P.J. Salvage and Delta brands. Delta Galil also designs, develops markets and sells branded denim and apparel under the brand 7 For All Mankind®, and ladies' and kids' apparel under the brand Splendid®. In addition, it sells its products under brand names licensed to the company, including adidas, Wolford, Wilson, Columbia, Tommy Hilfiger, Polo Ralph Lauren and others. For more information, visit www.deltagalil.com.

Safe Harbor Statement
Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may" "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein, and while expected, there is no guarantee that we will attain the aforementioned anticipated developmental milestones. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, tax rates in the various countries the company operates in, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.

DELTA GALIL INDUSTRIES LTD. Concise Consolidated Balance Sheets As of December 31, 2024
	December 31
		2024				2023
	(Audited)
	Thousands of Dollars
Assets
Current assets:
Cash and cash equivalents		120,509				174,463
Restricted Cash		1,305				2,950
Trade receivables		271,873				241,216
Taxes on income receivable		1,927				77
Others		56,998				48,920
Financial derivative		160				228
Inventory		400,533				361,416
Asset held for sale		1,773				1,773
Total current assets		855,078				831,043
Non-current assets:
Investments in associated companies accounted using the equity method and long-term receivables		12,824				14,897
Investment property		2,401				2,679
Fixed assets, net of accumulated depreciation		288,346				250,343
Goodwill		138,033				145,577
Intangible assets, net of accumulated amortization		294,899				277,952
Assets in respect of usage rights		257,629				237,177
Deferred tax assets		30,537				28,016
Financial derivative		511				903
Total non-current assets		1,025,180				957,544
Total assets		1,880,258				1,788,587

DELTA GALIL INDUSTRIES LTD. Concise Consolidated Balance Sheets As of December 31, 2024
	December 31
		2024				2023
	(Audited)
	Thousands of Dollars
Liabilities and Equity
Current liabilities:
Short-term bank loans		2,335				822
Current maturities of bank loans		20,939				24,105
Current maturities of bonds		29,476				29,597
Financial derivative		1,314				1,380
Current maturities of leases liabilities		53,663				52,583
Trade payables		237,371				168,637
Taxes on income payable		23,805				35,182
Provision for realignment plan		8,142				3,574
Others accounts payable		194,900				165,791
Total current liabilities		571,945				481,671
Non-current liabilities:
Bank loans		124,163				140,790
Severance pay liabilities, net		5,810				5,327
Liabilities in respect of leases		225,802				204,746
Other non-current liabilities		49,105				53,241
Bonds		64,712				96,496
Deferred taxes liabilities		33,394				35,812
Financial derivative		1,765				2,122
Total non-current liabilities		504,751				538,534
Total liabilities		1,076,696				1,020,205
Equity:
Equity attributable to equity holders of the parent company:
Share capital		23,714				23,714
Share premium		124,025				127,861
Other capital reserves		15,590				28,133
Retained earning		625,912				571,846
Treasury shares		(9,832	)			(13,668	)
		779,409				737,886
Minority interests		24,153				30,496
Total equity		803,562				768,382
Total liabilities and equity		1,880,258				1,788,587

DELTA GALIL INDUSTRIES LTD. Consolidated Statement of Comprehensive Income For the year and three month periods ending December 31, 2024
	Year ended December 31				% Increase/(Decrease)		Three months ended December 31				% Increase/(Decrease)
	2024		2023				2024		2023
	Thousands of Dollars
	(Excluding earning per share figures)
Sales	2,045,666		1,857,682		10%		599,227		508,603		18%
Cost of sales	1,189,374		1,097,084				349,099		289,468
Gross profit	856,292		760,598		13%		250,128		219,135		14%
% of sales	41.9%		40.9%				41.7%		43.1%
Selling and marketing expenses	568,151		522,214		9%		156,674		141,364		11%
% of sales	27.8%		28.1%				26.1%		27.8%
General and administrative expenses	105,222		93,334		13%		29,593		25,048		18%
% of sales	5.1%		5.0%				4.9%		4.9%
Other income, net and share in profit of associated company	(1,167)		(7,970)				(812)		(3,433)
Operating income excluding non-core items	184,086		153,020		20%		64,673		56,156		15%
% of sales	9.0%		8.2%				10.8%		11.0%
Non-core items	14,922		8,087				11,562		-
Operating income	169,164		144,933		17%		53,111		56,156		(5%)
Finance expenses, net	44,779		37,932		18%		13,244		8,635		53%
Income before taxes on income	124,385		107,001				39,867		47,521
Taxes on income	29,747		21,660				10,344		9,741
Net income	94,638		85,341		11%		29,523		37,780		(22%)
Net income excluding non-core items, net of tax	108,509		91,600		18%		40,957		37,780		8%
Net income attributed to the company's shareholders excluding non-core items, net of tax	100,281		85,407				37,693		34,366
Attribution of net earnings:
Attributed to company's shareholders	86,410		79,210				26,259		34,366
Attributed to non-controlling interests	8,228		6,131				3,264		3,414
	94,638		85,341				29,523		37,780
Net diluted earnings per share attributed to company's shareholders	3.29		3.02				1.00		1.31
Net diluted earnings per share, before non-core items, net of tax, attributable to Company's shareholders	3.82		3.25		18%		1.43		1.31		9%

DELTA GALIL INDUSTRIES LTD. Consolidated Cash Flow Reports
	Year ended December 31
		2024				2023
	(Audited)
	Thousands of Dollars
Cash flows from operating activities:
Net income		94,638				85,341
Adjustments required to reflect cash flows generated from operating activities		182,506				185,301
Interest paid in cash		(31,222	)			(31,184	)
Interest received in cash		3,511				4,014
Taxes on income refund (paid) in cash, net		(46,410	)			(12,658	)
Net cash generated from operating activities		203,023				230,814
Cash flows from investment activities:
Change in short-term deposit, net		-				60,422
Purchase of fixed assets and assets under construction		(73,994	)			(45,363	)
Purchase of intangible assets		(32,807	)			(7,624	)
Repayment (providing) of a loan from (to) a business partner		981				(1,089	)
Proceeds from selling of fixed asset		600				1,121
Others		1,207				1,083
Net cash generated from (used in) Investing activities		(104,013	)			8,550
Cash flows from financing activities:
Dividends paid to non-controlling interest holders in consolidated subsidiary		(14,488	)			(2,362	)
Long term payables credit for fixed assets purchase		(5,051	)			(6,684	)
Lease principle repayment		(49,932	)			(48,891	)
Repayment of bonds		(31,202	)			(46,255	)
Dividend paid		(32,972	)			(26,510	)
Receipt of a long-term loans from banking corporations		6,616				32,694
Repayment of long-term loans from banking corporations		(24,146	)			(44,457	)
Short-term credit from banking corporations, net		1,929				(50,663	)
Others		394				(1,383	)
Net cash used in financing activities		(148,852	)			(194,511	)
Net increase (decrease) in cash and cash equivalents		(49,842	)			44,853
Exchange rate differences and revaluation of cash and cash equivalents, net		(4,112	)			2,961
Balance of cash and cash equivalents at the beginning of the period, net		174,463				126,649
Balance of cash and cash equivalents at the end of the Period, net		120,509				174,463

DELTA GALIL INDUSTRIES LTD. Consolidated Cash Flow Reports
	Year ended December 31
		2024				2023
	(Audited)
	Thousands of Dollars
Adjustments required to reflect cash flows from operating activities:
Revenues and expenses not involving cash flow:
Depreciation		33,024				34,033
Amortization		65,731				61,961
Impairment of non-financial assets		5,344
Exchange rate (gains) losses		415				(124	)
Interest on loans and bonds		19,351				21,933
Interest received in cash		(3,511	)			(4,014	)
Taxes on income paid in cash, net		46,410				12,658
Deferred taxes on income, net		(2,738	)			(7,089	)
Interest due to lease agreements		11,871				9,251
Severance pay liability, net		(557	)			(1,599	)
Change in realignment accrual		4,568				941
Income from decrease of earn-out liability		-				(4,000	)
Capital gain		(512	)			(1,482	)
Change to the benefit component of options granted to employees		2,188				2,128
Share in profits of associated company accounted for using the equity method		(342	)			(846	)
Others		314				2,463
		181,556				126,214
Changes to operating assets and liabilities:
Increase in trade receivables		(37,762	)			(3,868	)
Increase in other receivable and balances		(7,822	)			(5,083	)
Increase (decrease) in trade payables		76,460				(46,251	)
Increase (decrease) in other payables		18,294				(15,274	)
Decrease (Increase) in inventory		(48,220	)			129,563
		950				59,087
		182,506				185,301

Contacts

For more information:
Nissim Douek
[phone]
[e-mail]

U.S. Media Contact:
Stacy Berns
Berns Communications Group
[phone]
[e-mail]

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