Record Financial Performance and Strategic Progress in 2025
Delta Galil Industries, listed on the Tel Aviv Stock Exchange, reported its financial results for the fourth quarter and full year ended December 31, 2025, highlighting a year defined by steady revenue growth, expanding profitability, and disciplined operational execution despite a complex and evolving global retail environment. The company, recognized worldwide as a designer, manufacturer, and marketer of branded and private label intimate apparel, activewear, loungewear, and denim for women, men, and children, demonstrated resilience through strong channel performance, continued investment in infrastructure, and strategic customer expansion that collectively supported record-level annual outcomes. Fourth-quarter sales rose 2 percent to reach an all-time high of $611.1 million compared with $599.2 million in the same period of the prior year, while full-year revenue increased 4 percent to a record $2,118.9 million, underscoring consistent demand across geographies and product categories and reinforcing the company’s long-term growth trajectory.
Gross Profit Expansion and Margin Improvement
Profitability trends remained favorable throughout the year, supported by improved operational efficiency, favorable product mix, and the growing contribution of direct-to-consumer channels. Fourth-quarter gross profit climbed 5 percent to a record $263.2 million versus $250.1 million in the comparable quarter of 2024, and full-year gross profit advanced 5 percent to $900.3 million compared with $856.3 million in the previous year. Gross margin in the fourth quarter improved by 140 basis points to 43.1 percent from 41.7 percent, reflecting a higher share of direct-to-consumer revenue, efficiency gains within manufacturing facilities, and supportive currency movements, partially offset by the financial impact of U.S. tariffs. For the full year, gross margin reached a record 42.5 percent, representing a 60-basis-point increase from 41.9 percent in 2024 and illustrating the company’s sustained focus on productivity, sourcing optimization, and disciplined pricing strategies. These results indicate a structurally stronger margin profile supported by both operational excellence and evolving channel dynamics.
Direct-to-Consumer Momentum and Digital Growth
Direct-to-consumer performance continued to serve as a central growth engine during 2025, with sales from owned brands excluding Bare Necessities increasing 15 percent in both the fourth quarter and the full year compared with the same periods in 2024. Own-web sales, again excluding Bare Necessities, surged 27 percent in the fourth quarter alone, marking the twelfth consecutive quarter of double-digit online growth and highlighting the effectiveness of digital merchandising, customer engagement initiatives, and omnichannel integration. This sustained expansion reflects changing consumer purchasing behavior as well as the company’s deliberate investments in e-commerce platforms, logistics capabilities, and brand storytelling that collectively enhance conversion, retention, and lifetime value. The consistent performance of digital channels also supports margin expansion due to reduced intermediary costs and stronger pricing control, reinforcing the strategic importance of the company’s direct relationship with consumers across global markets.
Earnings Performance and Cost Dynamics
Earnings before interest and taxes showed modest year-over-year pressure primarily due to tariff impacts and higher selling, general, and administrative expenses associated with retail expansion and infrastructure development. EBIT excluding non-core items in the fourth quarter totaled $59.3 million compared with $64.7 million in the prior-year quarter, while reported fourth-quarter EBIT reached $51.1 million versus $53.1 million a year earlier. For the full year, EBIT excluding non-core items amounted to $174.2 million, representing 8.2 percent of sales compared with $184.1 million or 9.0 percent of sales in 2024, and reported annual EBIT was $164.4 million compared with $169.2 million in the previous year. Although these figures reflect near-term cost pressures, they also demonstrate the company’s willingness to invest in long-term growth capabilities including retail footprint expansion, operational modernization, and supply chain resilience, initiatives expected to generate efficiency gains and profitability improvements over time.
Balance Sheet Strength and Shareholder Returns
Financial stability remained a defining feature of the company’s performance in 2025, supported by strong liquidity, disciplined capital allocation, and sustained equity growth. As of December 31, 2025, cash and cash equivalents totaled $135.8 million, while shareholders’ equity reached a record $903.6 million, reflecting retained earnings generation and prudent financial management. This robust balance sheet enabled the declaration of a $10 million dividend for the fourth quarter of 2025, consistent with the dividend distributed in the same quarter of the prior year and signaling confidence in ongoing cash flow generation and long-term profitability. The combination of liquidity strength, moderate leverage, and recurring shareholder distributions illustrates a balanced approach to growth investment and capital return that supports both operational flexibility and investor confidence.
Leadership Perspective and Strategic Execution
Chief Executive Officer Isaac Dabah emphasized that the fourth quarter concluded an outstanding year of execution achieved under challenging retail conditions shaped by tariff uncertainty, shifting consumer demand, and macroeconomic volatility. He noted that the company successfully navigated U.S. tariff impacts, expanded programs with major global customers, and generated record sales driven by organic growth across most channels, regions, and product categories. At the same time, continued investment in factories and distribution centers improved efficiency, strengthened operational capabilities, and enhanced the scalability of both owned brands and private label partnerships. Leadership highlighted that the company’s culture of continuous improvement, combined with the resilience of its balance sheet and the strength of its global platform, positions the organization to pursue another year of profitable expansion supported by innovation, disciplined execution, and customer-centric strategy.
Operational Investments and Global Platform Development
Throughout 2025, the company advanced strategic initiatives designed to reinforce long-term competitiveness across manufacturing, logistics, and brand development. Investments in production facilities focused on automation, productivity enhancement, and sustainability improvements aimed at lowering unit costs while maintaining product quality and responsiveness to customer demand. Distribution center upgrades improved fulfillment speed, inventory visibility, and omnichannel integration, supporting both wholesale and direct-to-consumer growth. These operational enhancements not only contributed to margin expansion during the year but also established a scalable infrastructure capable of supporting future revenue growth across multiple regions. The strengthening of the global platform further enables collaboration with leading retail partners while expanding the reach of proprietary brands into new consumer segments and geographic markets.
Continued Profitable Growth
Looking ahead, the company enters 2026 with positive momentum supported by record revenue, expanding margins, strong liquidity, and sustained digital growth. While external challenges such as tariffs, currency fluctuations, and retail market uncertainty may persist, the organization’s diversified channel mix, operational efficiency initiatives, and disciplined investment strategy provide a solid foundation for resilience and continued profitability. Management’s confidence reflects not only recent financial achievements but also structural improvements achieved across manufacturing efficiency, direct-to-consumer capabilities, and customer partnerships. With a strengthened balance sheet, consistent dividend policy, and ongoing innovation across product categories, the company appears well positioned to pursue sustainable growth and value creation in the years ahead.
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