Delta Galil Industries Ltd. turned a double-digit increase in revenues into an even larger boost in fourth-quarter profits as its investments in seamless technology and other innovative products continued to pay off.
In the three months ended Dec. 31, the Tel Aviv-based manufacturer generated net income of $8.3 million, or 35 cents a diluted share, 33.9 percent above the $6.2 million, or 26 cents, reported for the 2010 quarter. Sales grew 15.1 percent to $176.4 million from $153.2 million as gross margin improved to 21.2 percent of sales from 19.7 percent a year ago.
Isaac Dabah, chief executive officer of the firm, told WWD that, while the firm’s new license with Kenneth Cole covering intimate apparel and hosiery was getting “good response,” the fourth-quarter numbers represented organic growth, with the exception of KN Karen Neuburger, which the company acquired in June.
“We’re focused on innovation and performance,” he said. “These days, it’s about special products in areas that are still growing in this market, such as shapewear and activewear. Although we’re working on increasing the branded portion, right now, about 70 percent of what we do is private label.”
Among successful categories and programs that helped lift sales and profits during the quarter were seamless shapewear, bra programs with leading global brands and a sock initiative for Nike.
Delta Galil had been in negotiations with The Jones Group Inc. about the acquisition of the Jones jeanswear portfolio, but talks ended after the parties failed to reach an agreement by the end of 2011.
For the full year, net income rose 30.3 percent to $27.4 million, or $1.15 a diluted share, from $21.1 million, or 87 cents, while sales moved up 9.5 percent to $678.8 million.
In preliminary guidance for 2012, the company said it expected net income of $29 million to $31 million, or $1.18 to $1.27 a diluted share, on sales of between $700 million and $715 million. These would represent profit and sales increases of between 5.7 and 12.9 percent and between 3.1 and 5.3 percent, respectively.