Delta Galil is wheeling and dealing its way to a stronger position in the market, with acquisitions helping to boost its results in the second quarter.
The company’s net earnings rose 14 percent to $8.9 million, or 35 cents a share, from $7.8 million, or 30 cents, a year ago. Sales for the second quarter ended June 30 jumped 36 percent to $340.5 million from $249.5 million.
The company bought Seven For All Mankind, Splendid and Ella Moss from VF Corp. for $120 million last year and created the DG Premium Brands unit.
“During the quarter, we saw significant growth in Delta Galil USA, mainly kids and activewear categories and in the global upper market,” said Isaac Dabah, chief executive officer of Delta Galil. “Importantly, the gross margin in Delta Galil USA increased across all business units. Delta Premium Brands, our recent acquisition, continued to exceed the plan.
“Throughout the quarter we continued to invest in growing our production capacity, and are currently running our Vietnamese factory with 850 employees,” he said. “We expect to reach full operational status in the facility in the second half of 2018.”
The company also reaffirmed its guidance for the full year, calling for sales to grow to between $1.33 billion and $1.37 billion and earnings per share to rise to between $1.95 and $2.02.
Dabah said Delta Galil is “focused on growing our international and e-commerce businesses, while continuing to pursue strategic acquisition opportunities.”
That echoes a broader theme in the fashion world, where Coach Inc. bought Kate Spade & Co. and Michael Kors inked a deal to buy Jimmy Choo as both seek to position themselves as larger houses of brands.
Delta Galil ended the quarter with roughly $100 million in cash, which would come in handy should another deal present itself.
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