The strong showing of performance products incorporating its seamless technology helped Delta Galil Industries Ltd. stand up to brisk economic headwinds in Europe during the first quarter.
“Seamless has been continuously good, from shapewear to activewear and innerwear,” Isaac Dabah, chief executive officer of the Tel Aviv-based company, told WWD. “The more performance-related the product, the better it’s done. Even if the price is higher, the customer is looking for something more technical in nature, something that hasn’t been in the closet.”
The preference for those products has helped the firm mitigate difficulties in markets including Italy, Spain, Portugal, France and the U.K., Dabah said, while overall the U.S. market has been “somewhat better. There’s no question that we’re facing some headwinds, but our focus on innovation will help us grow even with the market contracting.”
In the three months ended March 31, Delta’s net income declined 32.8 percent to $3.9 million, or 16 cents a diluted share, from $5.8 million, or 24 cents. Excluding capital gains on a real estate asset sale in its year-ago quarter, profit was up 30.3 percent to $3.9 million from $3 million.
Sales grew 6.8 percent to $168.1 million from $157.4 million and gross margin picked up to 18.6 percent of sales from 18.4 percent a year ago.
Delta’s acquisition of Schiesser AG, the German underwear firm, remains on track to close in early July. The company will update its guidance and plans following the closing of the deal. Dabah said Thursday the company continues to expect sales of $700 million to $715 million with earnings per share of $1.18 to $1.27 in 2012 excluding the effect of Schiesser’s results.
Last year, sales totaled $678.8 million, 62 percent in North America, 15 percent in Europe excluding the U.K., 14 percent in Israel and 9 percent in the U.K.
On the Tel Aviv Stock Exchange Thursday, shares of Delta Galil declined 0.29 Israeli new shekels, or 8 cents at current exchange, to 37.47 Israeli new shekels, or $9.81, a 0.8 percent decline.