Delta Galil Reports Record Second Quarter 2026 Results

Record Second Quarter Sales of $511.6 Million and Double-Digit Year-over-Year Growth in Profitability, Reflect Strong Business Momentum

Record Second Quarter Cash Flow from Operating Activities, Excluding IFRS 16, of $56.8 Million, Compared to $13.0 Million in the Same Period Last Year

Net Debt / EBITDA Improved to 0.7x from 0.9x at March 31, 2026 due to $29.3 million Debt Reduction

$8 Million Dividend Declared for the Second Quarter 2026

Company Reaffirms the 2026 Guidance

CAESAREA, Israel--(BUSINESS WIRE)--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 kids, today reported financial results for the second quarter ended June 30, 2026.

• Sales increased 9% (5% in constant currency) to a second quarter record of $511.6 million, compared to $470.1 million in the prior year period.
• Gross profit, inclusive of tariff refunds, expanded 26% year-over-year to a second quarter record of $253.2 million. Excluding tariff impact, gross profit increased 17% compared to the second quarter last year.
• EBIT excluding non-core items and inclusive of tariff refund, of $54.6 million, compared to $31.0 million in the prior year period. Excluding tariff impact and non-core items EBIT increased 22% compared to the second quarter last year.
• Strong operating cash flow, excluding IFRS 16 and inclusive of a $33 million tariff refund, was $56.8 million, compared to $13 million in the second quarter of 2025
• During the second quarter of 2026, the Company received a cash refund of $33 million related to prior U.S. tariffs and intends to re-invest a portion of it into new strategic incremental growth initiatives, including investments to expand the Company’s manufacturing and supply chain capabilities.
• The impact of the IEEPA tariff refund on the second quarter of 2026 includes a $16.8 million increase to gross profit and EBIT, and a $13.2 million benefit to net income, or $0.50 per diluted share.
• Strong balance sheet with $122.9 million in cash and record shareholders’ equity of $938.3 million at June 30, 2026.
• Declares an $8 million dividend for the second quarter of 2026, compared to $8 million for the second quarter last year.

Isaac Dabah, CEO of Delta Galil, stated, “We delivered an outstanding second quarter that meaningfully strengthened the momentum established in the first quarter and demonstrated broad-based progress across our business. Excluding the benefits of an IEEPA tariff refund, we achieved record second-quarter sales and an all-time record gross margin of 45.2%, as well as double-digit growth in all other profitability indicators. We expect to use a portion of the proceeds from the tariff refund to invest strategically in our manufacturing, supply chain and overall structure to support our future growth and profitability.”

“Second quarter and year-to-date results demonstrate that our growth initiatives are translating into stronger revenue, expanding profitability and increased cash generation. While the tariff refund provided an additional benefit to our reported results and cash flow, the strength of our underlying performance reflects the continued execution of our strategy and the investments we have made in product innovation, owned brands, manufacturing flexibility, global sourcing, and distribution capabilities. With positive momentum across the business and net debt lower than a year ago, we believe Delta Galil is increasingly well positioned to deliver sustained profitable growth through the balance of 2026 and beyond,” concluded Mr. Dabah.

Sales

Second quarter sales increased 9% to $511.6 million, compared to $470.1 million in the second quarter of 2025. Sales in constant currency increased 5%, compared to the second quarter last year. First half sales were $1,084.6 million, a 12% increase from $968.8 million in the prior-year period.

Gross Margin

Gross profit in the second quarter grew 26% to $253.2 million, compared to $201.3 million in the second quarter of 2025. Gross profit in the first half of 2026 was $491.9 million, compared to $403.9 million in the prior-year period.

Gross margin in the second quarter of 2026 increased by 670-basis points to 49.5%, compared to 42.8% in the second quarter of 2025. Gross margin in the first half of 2026 was 45.4%, compared to 41.7% in the first half of 2025.

Both second quarter and first half of 2026 gross profit included a $16.8 million benefit from the tariff refund. Excluding the tariff refund, gross margin in the second quarter and first half reached 45.2% and 43.4% of sales, respectively.

The year-over-year increase in gross margin was due primarily to continued improved efficiency of the Company’s factories, positive exchange rates, higher proportion of Delta Israel activity from total sales which is characterized by higher gross margin than average and the benefit of the tariff refund.

EBIT

EBIT, excluding non-core items in the second quarter of 2026 increased 76% to $54.6 million, compared to $31.0 million in the prior year. EBIT in the second quarter of 2026 increased 70% to $52.7 million, compared to $31.0 million, in the second quarter last year.

The year-over-year increase in EBIT for the second quarter was primarily due to higher organic and non-organic sales, and continued improved efficiency of the Company’s factories, partially offset by higher SG&A expenses mainly due to exchange rates and business expansion.

EBIT, excluding non-core items in the first half of 2026 increased 43% to $91.2 million, compared to $63.7 million, in the same period last year. EBIT in the first half of 2026 increased 38% to $87.8 million, compared to $63.7 million, in the same period last year.

Both second quarter and first half of 2026 EBIT included a $16.8 million benefit from tariff refund. Excluding tariff refund and non-core items, EBIT in the second quarter and first half increased by 22% and 17%, respectively.

Non-Core Items

For the second quarter and the first half of 2026 the Company recorded non-core expenses of $1.9 and $3.4 million, respectively, for changes in fair value of liability with respect to conditioned consideration. For the second quarter and first half of 2025, the Company recorded no non-core expenses.

Net Income

Net income excluding non-core items, net of tax, in the second quarter of 2026 increased 106% to $34.4 million, compared to $16.7 million in the same period last year. Net income in the second quarter of 2026 increased 96% to $32.8, compared to $16.7 million in the same period last year.

Net income excluding non-core items, net of tax, in the first half of 2026 increased 52% to $52.0, compared to $34.3 million in the same period last year. Net income in the first half of 2026 increased 43% to $49.2, compared to $34.3 million in the same period last year.

Both second quarter and first half of 2026 net income included a $13.1 million benefit from tariff refund. Excluding tariff refund and non-core items, net income in the second quarter and first half increased by 27% and 13%, respectively.

Diluted Earnings Per Share

Diluted earnings per share, excluding non-core items, net of tax, in the second quarter of 2026 was $1.21, compared to $0.57 in the same period last year. Diluted earnings per share in the second quarter of 2026 were $1.15, compared to $0.57 in the same period last year.

Diluted earnings per share, excluding non-core items, net of tax, in the first half of 2026 was $1.84, compared to $1.18 in the same period last year. Diluted earnings per share in the first half of 2026 was $1.73, compared to $1.18 in the same period last year.

Diluted earnings per share, excluding tariff refund and non-core items, net of tax, in the second quarter and first half of 2026 increased 25% and 14% to $0.71 and $1.34, respectively, compared to $0.57 and $1.18 in the same periods last year.

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

EBITDA, excluding IFRS 16, was $62.7 million, compared to $39.1 million in the second quarter of 2025. In the first half of 2026, EBITDA excluding IFRS 16 impact was $107.5, compared to $79.6 million in the first half of 2025. EBITDA excluding IFRS 16 and tariff refund in the second quarter and the first half of 2026, increased by 17% and 14%, respectively and reached $45.9 million and $90.7 million.

Cash flow generated from operating activities, excluding IFRS 16, was $56.8 million, compared to $13.0 million in the second quarter of 2025. Cash flow generated from operating activities, excluding IFRS 16, was $84.7 million in the first half of 2026, compared to $17.1 million in the first half of 2025. The year-over-year increase in operating cash flow was primarily due to improved profitability, a $33 million tariff refund, and reduced working capital, mainly associated with changes in accounts receivables and inventory.

Net Debt to EBITDA, excluding IFRS 16, as of June 30, 2026, was 0.7x, compared to 0.9x at June 30, 2025.

Equity on June 30, 2026, was a record $938.3 million, compared to $852.0 million on June 30, 2025.

Delta Galil declared a dividend of $8 million, or $0305 per share, which will be distributed on August 19, 2026, with a record and “ex-dividend” date of August 12, 2026.

2026 Financial Guidance

The Company reaffirmed its 2026 guidance, which excludes non-core items and tariff refund, and is based on 1.15 US $ per 1 Euro, 3.00 NIS per 1 US $ and current tax and duty rates:

	Full Year 2026 Guidance (in millions, except per share amount)	Full Year 2025 Results (in millions, except per share amount)
Sales	$2,294 – 2,328	$2,118.9
EBIT	$204 – 212	$174.2
EBITDA	$324 – 332	$282.8
Net income	$123 – 116	$102.6
Diluted EPS ($)	$4.23 – 4.00	$3.55

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 is an innovative, global company engaged in the design, development, production and marketing of intimate apparel and activewear. The Company offers products in a wide range of categories – Ladies intimates, men’s underwear, loungewear, activewear, sleepwear, shapewear and socks. The Company's main markets are the U.S., Europe and Israel.

Delta Galil's leading customers include Nike, Victoria's Secret, Lululemon, Skims, Walmart and others. In addition, the Company owns a wide portfolio of owned brands such as Delta, Schiesser, Eminence, Athena, Splendid PJ Salvage and under license agreements for leading brands such as adidas, Columbia, Calvin Klein, Tommy Hilfiger and others. The Company also designs, develops, markets and sells denim under the Seven for All Mankind brand.

Delta Galil has a vertically integrated and global production and distribution platform that includes the entire value chain, from the design stage to the delivery of the final product, which allows for operational flexibility, high efficiency and rapid response to market changes.

The Company's CEO and controlling shareholder is Mr. Isaac Dabah, who has extensive, global experience in the fashion and apparel sector.

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.

Source: Delta Galil Industries, Ltd.

DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Balance Sheets
As of June 30, 2026
	June 30		December 31
	2026	205	2025
	(Unaudited)		(Audited)
	Thousands of Dollars
Assets
Current assets:
Cash and cash equivalents	121,532	88,692	133,973
Restricted Cash	1,418	1,501	1,802
Trade receivables	187,712	191,776	223,418
Income taxes receivable	7,018	1,080	2,569
Other accounts receivable	60,343	59,196	64,229
Financial derivative	2,288	505	1,390
Inventory	458,076	491,803	430,348
Assets held for sale	2,997	4,770	2,997
Total current assets	841,384	839,323	860,726
Non-current assets:
Investments accounted for using the equity method and long-term receivables	16,369	12,827	13,150
Investment property	2,375	2,640	2,513
Property, plant and equipment, net, including assets under construction	368,073	335,502	356,365
Goodwill	187,719	142,494	188,877
Brand names	155,465	138,730	157,704
Intangible assets, net of accumulated amortization	189,838	163,069	165,186
Right of use assets	356,494	292,170	294,733
Deferred tax assets	36,755	35,637	36,562
Financial derivative	5,002	1,956	3,202
Total non-current assets	1,318,090	1,125,025	1,218,292
Total assets	2,159,474	1,964,348	2,079,018

DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Balance Sheets
As of June 30, 2026
	June 30				December 31
	2026		2025		2025
	(Unaudited)				(Audited)
	Thousands of Dollars
Liabilities and Equity
Current liabilities:
Short-term bank loans	68,759		39,711		96,437
Current maturities of long term bank loans	25,474		22,325		23,759
Current maturities of bonds	33,471		31,289		31,625
Financial derivative	-		228		-
Current maturities of leases liabilities	79,649		68,730		72,690
Trade payables	204,631		213,580		188,055
Income taxes payable	16,299		14,993		21,146
Provision for realignment plan	1,806		3,506		2,898
Others payables	206,877		197,520		207,634
Total current liabilities	636,966		591,882		644,244
Non-current liabilities:
Bank loans	128,762		118,140		141,455
Post-employment benefits obligation, net	5,880		5,729		6,081
Lease Liability	310,684		249,916		253,299
Other non-current liabilities	63,151		43,783		54,695
Bonds	39,947		67,661		38,274
Deferred taxes liabilities	35,739		35,191		37,371
Total non-current liabilities	584,163		520,420		531,175
Total liabilities	1,221,129		1,112,302		1,175,419
Equity:
Equity attributable to company's shareholders:
Share capital	23,714		23,714		23,714
Share premium	123,228		123,720		123,184
Other capital reserves	58,859		47,997		56,352
Retained earnings	706,650		639,992		678,210
Treasury shares	(7,802	)	(9,384	)	(8,848	)
	904,649		826,039		872,612
Non-controlling interests	33,696		26,007		30,987
Total equity	938,345		852,046		903,599
Total liabilities and equity	2,159,474		1,964,348		2,079,018

DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Statement of Income
For the six-month and three-month periods ending June 30, 2026
	Six months ended June 30		Increase/ (Decrease)	Three months ended June 30		Increase/ (Decrease)
	2026	2025	%	2026	2025	%
	(Unaudited)			(Unaudited)
	Thousands of Dollars			Thousands of Dollars
	Excluding Earning Per Share data			Excluding Earning Per Share data
Sales	1,084,609	968,794	12%	511,636	470,124	9%
Cost of sales	592,684	564,882		258,471	268,800
Gross profit	491,925	403,912	22%	253,165	201,324	26%
% of sales	45.4%	41.7%		49.5%	42.8%
Selling and marketing expenses	339,759	286,732	18%	169,187	144,386	17%
% of sales	31.3%	29.6%		33.1%	30.7%
General and administrative expenses	61,489	53,174	16%	29,663	25,126	18%
% of sales	5.7%	5.5%		5.8%	5.3%
Other income, net and Share in losses (profits) of investees accounted for using the equity method	(570)	298		(326)	784
Operating income excluding non-core items	91,247	63,708	43%	54,641	31,028	76%
% of sales	8.4%	6.6%		10.7%	6.6%
Non-core items	3,436	-		1,957	-
Operating income	87,811	63,708	38%	52,684	31,028	70%
Financing expenses, net	22,190	19,045	17%	9,115	9,448	(4%)
Income before tax on income	65,621	44,663	47%	43,569	21,580	102%
Income taxes expenses	16,461	10,324	59%	10,809	4,844	123%
Net income for the period	49,160	34,339	43%	32,760	16,736	96%
Net income for the period excluding non-core items, net of tax	52,029	34,339	52%	34,394	16,736	106%
Attribution of net earnings for the period:
Attributed to Company's shareholders	45,579	31,271		30,185	15,052
Attributed to non-controlling interests	3,581	3,068		2,575	1,684
	49,160	34,339		32,760	16,736
Net diluted earnings per share attributed to company's shareholders	1.73	1.18		1.15	0.57
Net diluted earnings per share, before non-core items, net of tax, attributable to Company's shareholders	1.84	1.18	56%	1.21	0.57	112%

DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
For the six-month and three-month periods ending June 30, 2026
	Six months ended June 30		Three months ended June 30
	2026	2025	2026	2025
	(Unaudited)		(Unaudited)
	Thousands of Dollars		Thousands of Dollars
Cash flows from operating activities:
Net income for the period	49,160	34,339	32,760	16,736
Adjustments required to present cash flows from operating activities	111,539	46,102	56,730	26,354
Interest paid in cash	(18,643)	(15,758)	(8,048)	(6,797)
Interest received in cash	1,999	841	1,364	402
Income taxes paid in cash, net	(26,411)	(21,451)	(9,447)	(11,058)
Net cash generated from operating activities	117,644	44,073	73,359	25,637
Cash flows from investment activities:
Acquisition of property, plant including under construction	(22,836)	(55,177)	(10,259)	(34,542)
Acquisition of intangible assets	(14,305)	(10,354)	(7,185)	(5,034)
Proceeds from sale of property, plant and equipment	120	4,152	97	2,428
Others	(2,801)	(132)	(2,442)	275
Net cash used in Investing activities	(39,822)	(61,511)	(19,789)	(36,873)
Cash flows from financing activities:
Dividend paid to non-controlling interests in subsidiary	(3,604)	(2,514)	(870)	(835)
Payment of long-term payables in connection with acquisition of property, plant and equipment under construction	(3,882)	(2,412)	(1,921)	(1,209)
Principal elements of lease payments	(32,901)	(26,982)	(16,526)	(12,596)
Dividend paid	(18,021)	(18,020)	(7,999)	(7,997)
Receipt of long-term bank loans	-	967	-	-
Repayment of long-term bank loans	(10,288)	(9,664)	(2,444)	(2,230)
Short-term credit from banking corporations, net	(27,609)	36,877	(29,239)	27,414
Others	2,721	(255)	1,720	(23)
Net cash generated from (used in) financing activities	(93,584)	(22,003)	(57,279)	2,524
Net decrease in cash and cash equivalents	(15,762)	(39,441)	(3,709)	(8,712)
Effects of exchange rate changes on cash and cash equivalents	3,321	7,624	3,525	7,216
Balance of cash and cash equivalents at the beginning of the period, net	133,973	120,509	121,716	90,188
Balance of cash and cash equivalents at the end of the Period, net	121,532	88,692	121,532	88,692

DELTA GALIL INDUSTRIES LTD.
Concise Consolidated Cash Flow Reports
For the six-month and three-month periods ending June 30, 2026
	Six months ended June 30		Three months ended June 30
	2026	2025	2026	2025
	(Unaudited)		(Unaudited)
	Thousands of Dollars		Thousands of Dollars
Reconciliations required to present cash flows generated by operating activities:
Adjustments in respect of:
Depreciation	17,861	16,848	8,844	8,585
Amortization	41,471	34,725	20,935	17,913
Interest in respect of bonds and loans	10,525	8,885	4,224	3,262
Interest received in cash	(1,999)	(841)	(1,364)	(402)
Taxes on income paid in cash, net	26,411	21,451	9,447	11,058
Deferred taxes on income, net	(633)	(6,941)	(221)	(5,240)
Interest expenses recognized in respect of lease agreements	8,118	6,873	3,824	3,535
Retirement benefit obligation, net	(103)	(487)	(77)	27
Change in realignment plan provision	(1,092)	(4,636)	(643)	(3,797)
Change in fair value of liability due to contingent consideration	3,436	-	1,957	-
Loss (Gain) from disposal of property, plant and equipment	(78)	(1,505)	(82)	(1,028)
Share-based payments expenses	1,154	1,163	545	749
Share in profits of investee accounted for using the equity method	90	156	40	9
Others	(2,388)	2,533	(290)	2,425
	102,773	78,224	47,139	37,096
Changes to operating assets and liabilities:
Decrease in trade receivables	33,150	92,130	25,353	28,367
Decrease (Increase) in other receivable	(966)	(1,418)	163	470
Increase (decrease) in trade payables	19,253	(40,928)	(13,465)	(34,324)
Increase (decrease) in other payables	(16,201)	(15,936)	11,747	7,887
Increase in inventory	(26,470)	(65,970)	(14,207)	(13,142)
	8,766	(32,122)	9,591	(10,742)
	111,539	46,102	56,730	26,354