Delta Galil ended 2016 on strong note with fourth-quarter operating profit up by 80 percent and sales up by 31.
But only some of that is due to the company’s expansion through a trio of brands it picked up from VF Corp. over the year.
Although the June acquisition of Ella Moss, Splendid and Seven For All Mankind has been a boost, the apparel company’s fourth-quarter operating profit rose to $32.3 million from $17.9 million. Net income increased to $18.5 million from $12.3 million a year earlier. Total sales exceed $376 million, up from just over $287 million in 2015, growth the company said was mostly “organic.”
On the whole, 2016 was a good year for Delta Galil, and it posted operating profit of $85.3 million, a 24 percent increase over 2015 and a company record on total sales of about $1.2 billion.
Delta Galil’s chief executive officer Isaac Dabah pointed to the firm’s earnings before interest, tax, depreciation and amortization, which grew by 31 percent in the fourth quarter excluding the VF acquisition, as proof of the new brands’ marginal impact on the overall performance.
“The VF acquisition only added about $1.5 million in profit for the quarter,” Dabah said.
He said the company’s U.S. segment led in sales for the year, despite dropping 6 percent from 2015, followed by global upper market sales, but again, Dabah attributed a majority of sales to other parts of the business, like activewear and men’s socks and underwear.
“We’re a little bit unique in that most of our business is non-cyclical. We’re lucky,” Dabah said.
As for 2017, Dabah said the company intends to continue on a path of expansion and double-digit growth, but not necessarily through more acquisitions.
“We’re looking to be able to fully digest the VF brands and we’re looking to grow them.”
Dabah said Delta Galil is “always looking” for acquisitions, “but it’s got to be something really special.”