Delta Galil Industries Ltd. has realigned its senior management as it prepares to take on a new acquisition and further expand its global footprint.
As the company reported an increase in sales but drop in profits for the second quarter, it promoted Yossi Hajaj, currently chief financial officer, to the new post of deputy chief executive officer, executive vice president and head of global operations.
Jacob Heen will join the firm as Hajaj’s successor in October. He has most recently served in the same capacity at Tnuva Group, Israel’s leading food products group, and Cellcom Israel Ltd., the company’s largest telecommunications company.
The appointments come a week after Tel Aviv-based Delta Galil agreed to acquire the P.J. Salvage loungewear and sleepwear brand and many of the assets of its parent, Los Angeles-based Loomworks Apparel Inc., and as the firm.
“The opening of our seamless research and development center at Nike headquarters in Oregon and our men’s and ladies’ underwear license with Columbia reflect the growth of these two important customer relationships,” said Isaac Dabah, ceo of Delta Galil, adding that the firm is adding output capacity through a factory in Vietnam and a dye house in Egypt.
The company’s efforts allowed it to register top-line growth in the second quarter while currency headwinds contributed to declines in net income.
In the three months ended June 30, net income fell 4.7 percent to $9.3 million, or 36 cents a diluted share, from $9.8 million, or 38 cents in the prior-year quarter.
Sales grew 2.6 percent to $255.5 million from $249.2 million a year ago, with currency neutral sales growth at 8 percent, while gross margin decelerated to 28.4 percent of sales from 31.2 percent.
“While the volatile currency exchange environment posed headwinds to profit growth, we still delivered our second-highest quarter for sales and increased our cash flow substantially,” Dabah said.
Delta Galil reiterated full-year guidance for revenues of between $1.07 billion and $1.09 billion and earnings per share of $1.88 to $2. The estimates assume no change in the current exchange rates between the dollar, the euro and the new Israeli shekel.
For the first six months, net income dropped 4.6 percent to $18.2 million, or 71 cents, while sales were up 4.3 percent to $508.4 milion.