Delta Galil sales drop 9% in Q4 on reduced premium and US volume
Intimates and apparel manufacturer and marketer Delta Galil Industries, Ltd. reported net sales of $459.7 million for the fourth quarter ended December 31, 2020, on Wednesday, a decrease of 9% compared to $504.8 million in the same period in the previous year.
The Tel Aviv, Israel-based company, which owns labels such as 7 For All Mankind, Schiesser and Eminence, and holds licenses for brands including Wilson, Spalding, Columbia and Tommy Hilfiger, said that the decline in its sales was primarily related to reduced volume in its premium, Delta USA and global upper market business segments due to the Covid-19 pandemic.
The group did, however, see strong growth in sales on its owned e-commerce platform, which rose 183% year over year to $76.1 million, compared to $26.9 million in the prior-year period.
Quarterly net income at Delta Galil was $23.7 million, or $0.94 per diluted share, compared to $35.6 million, or $1.39 per diluted share, in the fourth quarter of 2019.
The company’s full-year sales for 2020 totaled $1.45 billion, falling 14% from $1.69 billion in 2019. Annual e-commerce sales increased 130% year over year to $152.5 million.
The manufacturer posted a net loss of $40.5 million, or $1.56 per diluted share, for the year, compared to net income of $57.7 million, or $2.26 per diluted share, the year before.
“Without a doubt, 2020 represented an unprecedented year for Delta Galil, as Covid-19 forced us to rethink ways in which we conduct business,” said Delta Galil CEO Isaac Dabah in a release. “I am pleased with our agility to respond to the pandemic and implement the necessary initiatives to reduce costs and improve our operational and financial flexibility.”
Over the course of the year, Delta Galil sought to drive the growth of its digital business and, in August, the company acquired online intimates retailer Bare Necessities. The transaction is expected to be accretive to earnings this year.
The group also completed an IPO for its Israeli subsidiary, Delta Israel Brands, which raised $80 million, for a post money valuation of $400 million.
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