Second Quarter Sales Remained Stable Year-Over-Year at $470.1 Million Despite the U.S. Tariff Impact and the Israel-Iran War

Record Second Quarter Direct-To-Consumer Sales, Increased 9% Year-Over-Year

Record Second Quarter Gross Margin of 42.8%

Strong Balance Sheet with Record Equity of $852.0 Million

Dividend Declared of $8.0 Million for the Second Quarter 2025

Delta Galil Industries, Ltd. (DELG/Tel Aviv Stock Exchange), the global designer, manufacturer and marketer of branded and private label intimate, activewear, loungewear and denim apparel for ladies, men, and children, today reported financial results for the second quarter ended June 30, 2025.

• Second quarter sales of $470.1 million remained stable from the prior year quarter
• Own-web sales (excluding Bare Necessities) increased 29%, representing the 10^th consecutive quarter of double-digit growth
• Gross profit in the second quarter increased 2% to $201.3 million, compared to $197.4 million for the second quarter last year
• Second quarter EBIT was $31.0 million, compared to $37.8 million for the second quarter last year
• Declares a $8.0 million dividend for the second quarter of 2025, same as for the second quarter last year

Isaac Dabah, CEO of Delta Galil, stated, “Delta delivered solid second quarter financial results despite the challenging US tariff environment this year. Despite the tariff impact, second quarter steady sales demonstrate the strength of our diversified, global platform including robust growth in our branded direct-to-consumer channels. Our record gross margin in this quarter on a backdrop of tariff uncertainty is a true achievement and a testament to the strength and flexibility of our vertical operating model and the agility of our operating team. Going forward, we see opportunity to gain market share due to our strategically located hub in Egypt with low tariff and no duty generating increasing demand from strategic customers.”

“Our robust balance sheet remains a competitive advantage, providing Delta with the flexibility to invest in our facilities, operations and multi-year growth initiatives. We are expanding and streamlining factories in strategic locations, enhancing logistics centers, and expanding our store footprint and e-commerce platform globally. We remain confident in our ability to create value for our shareholders in 2025 and beyond,” concluded Mr. Dabah.

Sales

Second quarter 2025 sales remained stable and reached $470.1 million, compared to $471.4 million in the second quarter of 2024, despite exogenic one-time factors. First half sales were $968.8 million, a 5% increase from $922.2 million in the prior-year period.

DTC sales of the Company’s owned brands increased 9% and 12% in the second quarter and the first half of 2025, respectively, compared to the same periods last year.

Gross Margin

Gross profit in the second quarter was $201.3 million compared to $197.4 million in the second quarter of 2024. Gross profit in the first half of 2025 was $403.9 million compared to $387.9 million in the prior-year period.

Gross margin in the second quarter of 2025 increased by 90-basis points to a second quarter record of 42.8%, compared to 41.9% in the second quarter of 2024. The year-over-year increase in the second quarter gross margin was due primarily to positive exchange rates, higher DTC sales and favorable segment mix, partially offset by the U.S. tariff impact and a lower export subsidy in our Egyptian operation. Gross margin in the first half of 2025 was 41.7%, compared to 42.1% in the first half of 2024.

EBIT

EBIT in the second quarter of 2025 was $31.0 million, compared to $37.8 million, in the second quarter last year. The year-over-year decrease in second quarter EBIT was primarily due to higher selling and marketing expenses due to negative exchange rate impact, the expansion of direct-to-consumer operations and additional costs associated with the new brand Passionata acquired last year, partially offset by higher gross margin as stated above.

EBIT in the first half of 2025 was $63.7 million, compared to $63.8 million in the same period last year. In the first half of 2025, EBIT before non-core items was $63.7 million, or 6.6% of sales, compared to $67.2 million, or 7.3% of sales, in the first half of 2024.

Non-Core Items

For the second quarter and first half of 2025, the Company recorded no non-core expenses. For the first half of 2024, expenses associated with the Company’s previously disclosed realignment plan for Bare Necessities were $3.4 million,

Net Income

Net income in the second quarter of 2025 was $16.7 million, compared to $21.0 million in the same period last year.

Net income in the first half of 2025 was $34.3 million, compared to $33.1 million in the first half last year. Net income excluding non-core items, net of tax, was $34.3 million, compared to $35.5 million in the first half of 2024.

Diluted Earnings Per Share

Diluted earnings per share in the second quarter of 2025 was $0.57, compared to $0.74 in the second quarter last year.

Diluted earnings per share in the first half of 2025 were $1.18, compared to $1.13 in the same period last year. Diluted earnings per share, excluding non-core items, net of tax, were $1.18, compared to $1.22 in 2024.

EBITDA, Cash Flow, Net Debt, Equity, and Dividend

EBITDA, excluding IFRS 16, in the second quarter of 2025 was $39.1 million, compared to $46.5 million in the second quarter of 2024. In the first half of 2025, EBITDA excluding IFRS 16 impact was $79.6, compared to $84.2 million in the first half of 2024.

Cash flow generated from operating activities, excluding IFRS 16, was $13.0 million, compared to $28.1 million in the second quarter of 2024. Cash flow generated from operating activities, excluding IFRS 16, was $17.1 million in the first half of 2025, compared to $51.5 million in the first half of 2024. The year-over-year reduction in operating cash flow was primarily attributable to changes in working capital to support expected sales growth in the second half of the year.

Net Debt to EBITDA, excluding IFRS 16, as of June 30, 2025, was 0.9x, compared to 0.8x at June 30, 2024.

Equity on June 30, 2025, was $852.0 million, compared to $771.8 million on June 30, 2024.

Delta Galil declared a dividend of $8.0 million, or $0.3065 per share, which will be distributed on September 9, 2025, with a record and “ex-dividend” date of August 28, 2025.

2025 Financial Guidance

The Company’s 2025 guidance excludes non-core items, based on the exchange rates of $1.15 to 1 Euro and 3.45 NIS to $1 and is based on the current tax and tariffs rates:

The Company is working to offset the effects of tariffs by strategically optimizing its sourcing and production to countries with lower exposure to tariffs. In addition, the Company is working with its vendors and customers to minimize the tariffs’ impact. The Company estimates that based on current tariff rates, the potential impact on 2025 annual operating income will not exceed $22 million. This impact is included in the guidance above.

Constant Currency - Excluding the Impact of Foreign Currency

This release refers to “reported” amounts in accordance with IFRS accounting principles (“GAAP”), which include translation and transactional impacts from foreign currency exchange rates. The release also refers to “constant dollar” amounts, which exclude the impact of translating foreign currencies into U.S. dollars, and are considered a non-GAAP financial measure. These constant currency performance measures should be viewed in addition to, and not in lieu of, or superior to, Delta Galil’s operating performance measures calculated in accordance with GAAP.

About Delta Galil Industries

Delta Galil Industries is a global designer, manufacturer and marketer of branded and private label apparel products for men, women and children. Since its inception in 1975, the Company has continually endeavored to create products that follow a body-before-fabric philosophy, placing equal emphasis on comfort, aesthetics and quality. Delta Galil develops innovative seamless apparel including bras, shapewear and socks; intimate apparel for women; underwear for men including under its owned brands Schiesser, Eminence, Organic Basics, and Athena; babywear, activewear, sleepwear, and loungewear including under its owned P.J. Salvage and Delta brands. Delta Galil also designs, develops markets and sells branded denim and apparel under the brand 7 For All Mankind®, and ladies’ and kids’ apparel under the brand Splendid®. In addition, it sells its products under brand names licensed to the company, including adidas, Wolford, Wilson, Columbia, Tommy Hilfiger, Polo Ralph Lauren and others. For more information, visit www.deltagalil.com.

Safe Harbor Statement

Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may" "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein, and while expected, there is no guarantee that we will attain the aforementioned anticipated developmental milestones. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, tax rates in the various countries the Company operates in, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.

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