Israeli apparel maker Delta Galil Industries Ltd. reported that first-quarter sales increased 2 percent over last year.

The company did experience a market-to-market valuation on hedging transactions that resulted in a loss, which impacted operating and net incomes.

Net income for the quarter fell to $7.9 million, or 31 cents a diluted share, down from $8.9 million, or 35 cents, a year ago.

Sales for the three months ended March 31 increased 2 percent to $256.7 million from $252.8 million a year earlier. The growth was due to an improvement in Europe and Israel.

“Our 2016 first-quarter results were in line with expectations, reflecting a moderate top-line growth and a double-digit increase in operating profit before the effect of hedging,” said Isaac Dabah, chief executive officer of Delta Galil. “During the quarter, we began to benefit from investments made in 2015 to improve our business, as we saw a significant increase in Delta USA’s operating profit and meaningful improvements in our global upper market performance resulting from efficiencies in our owned factories.”

Dabah went on to say he was pleased with the launch of the Puma brand and said the company plans to expand its portfolio of licensed brands by pursuing strategic acquisitions.

Delta Galil reaffirmed its guidance for 2016. Full-year sales are expected to range between $1.09 billion and $1.1 billion, an increase of 1 to 3 percent over 2015. Full-year diluted earnings per share are forecast to be in the range of $1.93 to $2.02, an increase of 2 percent to 7 percent over last year.

Delta Galil stock was lately trading at $28.05.

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