Delta Galil Reports First-Quarter 2024 Results
Net Income Increased 300% to
Total Sales Increased 2%, Demonstrating the Strength of Delta’s Brands as well as the Value and Offerings the Company Provides its
Gross Margin Increased to a First Quarter Record of 42.3%
First-Quarter EBIT Increased 80% to
First-Quarter Net-profit Before Non-Core Items Increased 86% to
Operating Cash Flow, Excluding IFRS 16, Increased 114% to a First Quarter record of
Strong Balance Sheet with Equity of
Doubles the declared divided to
Management Updates 2024 Guidance, and with the Strong Start to the Year, Expects 2024’s Annual Financial Results to be in the Mid to Upper-Range of its original Guidance
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First-quarter sales increased 2% to
$450.8 million , driven by growth across most of the Company’s segments - First-quarter online sales of the Company’s own brands increased 18%
- Gross margin improved 320 basis points to a first-quarter record of 42.3%
-
First quarter EBIT before non-core items increased by 48% to
$29.4 million , or 6.5% of sales compared to$19.8 million , or 4.5% of sales, for the same period last year -
First quarter net-income before non-core items increased by 86% to
$14.5 million , or 3.2% of sales compared to$7.8 million , or 1.8% of sales, for the same period last year -
First-quarter diluted earnings per share before non-core items increased 88% to
$0.49 -
Operating cash flow, for the three months ended
March 31, 2024 , excluding IFRS 16, improved 114% to a record Quarter one level of$23.5 million -
Strong balance sheet with
$187.4 million in cash and shareholders’ equity of$764.6 million atMarch 31, 2024 -
Net debt, excluding IFRS 16, declined 38% to
$139.0 million , compared to$224.0 million atMarch 31, 2023 -
Doubles the declared divided to
$8.0 million for first quarter 2024, compared to$4.0 million for first quarter 2023
Sales
The Company reported first-quarter 2024 sales of
Gross Margin
Gross margin in the first quarter of 2024 increased to a first quarter record of 42.3%, compared to 39.1% for the same period last year. The 320-basis point expansion was due primarily to a better customer and channel mix, improved profitability of our factories due to higher volume, and lower freight costs.
EBIT
EBIT in the first quarter of 2024 increased by 80% to
The increase in EBIT was due to higher sales and gross margin, partially offset by higher SG&A expenses.
Non-Core Items
For the first quarter of 2024, expenses associated with the Company’s previously disclosed realignment plan for Bare Necessities were
Net Income
Net income in the first quarter of 2024 increased 300% to
Diluted Earnings Per Share
Diluted earnings per share in the first quarter of 2024 were
EBITDA, Cash Flow, Net Debt, Equity, and Dividend
EBITDA excluding IFRS 16 impact in the first quarter of 2024 was
Cash flow generated from operating activities, excluding IFRS 16, was a first quarter record of
Net financial debt, excluding IFRS 16, at
Equity on
Delta Galil declared a dividend of
202 4 Financial Guidance
Based on the strong start to the year, and current outlook, management expects 2024’s financial results to be in the mid to upper part of its original guidance range. The Company’s guidance excludes non-core items, including IFRS 16, is based on ex-rates of
These forward-looking statements are based largely on the expectations of the Company and are subject to uncertainties including macroeconomic trends. Actual results may differ materially from those included in the guidance as result of risks and uncertainties which cannot be fully predicted. There is no certainty that the aforementioned conditions will occur, and actual results may be significantly different from those forecasted or implied below.
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Full Year 2024 Updated Guidance (in millions, except per share amount) |
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Full Year 2024 Original Guidance (in millions, except per share amount) |
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2023 Results (in millions, except per share amount) |
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Sales |
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EBIT |
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EBITDA |
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Net income |
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Diluted EPS ($) |
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Based on the Company's order book and projections, the Company expects growth in 2024 to materialize mostly in the second half of the year.
The Company's expectations depend, among others, on the following: returning to normalized inventory levels at our main customers driving higher demand and improving profitability, expanding into new categories, launching new global collections, increasing production levels in our new factories in
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
About
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
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2024 |
|
2023 |
|
2023 |
|
(Unaudited) |
|
(Audited) |
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Thousands of Dollars |
||||
|
|
|
|
|
|
|
|
|
|
|
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Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
187,369 |
|
118,267 |
|
174,463 |
Restricted Cash |
1,859 |
|
2,916 |
|
2,950 |
Short-term deposits |
- |
|
63,147 |
|
- |
Trade receivables |
204,655 |
|
194,875 |
|
241,216 |
Taxes on income receivable |
1,436 |
|
11,848 |
|
77 |
Others |
50,177 |
|
40,802 |
|
48,920 |
Financial derivative |
76 |
|
251 |
|
228 |
Inventory |
394,283 |
|
476,186 |
|
361,416 |
Asset held for sale |
1,773 |
|
- |
|
1,773 |
Total current assets |
841,628 |
|
908,292 |
|
831,043 |
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
Investments in associated companies accounted using |
|
|
|
|
|
the equity method and long-term receivables |
15,068 |
|
12,372 |
|
14,897 |
Investment property |
2,585 |
|
2,726 |
|
2,679 |
Fixed assets, net of accumulated depreciation |
253,698 |
|
236,436 |
|
250,343 |
|
144,730 |
|
144,959 |
|
145,577 |
Intangible assets, net of accumulated amortization |
292,567 |
|
273,158 |
|
277,952 |
Assets in respect of usage rights |
237,880 |
|
199,457 |
|
237,177 |
Deferred tax assets |
30,967 |
|
24,939 |
|
28,016 |
Financial derivative |
714 |
|
1,114 |
|
903 |
Total non-current assets |
978,209 |
|
895,161 |
|
957,544 |
Total assets |
1,819,837 |
|
1,803,453 |
|
1,788,587 |
|
|
|
|
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|
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|
2024 |
|
2023 |
|
2023 |
|||
|
(Unaudited) |
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(Audited) |
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Thousands of Dollars |
|||||||
Liabilities and Equity |
|
|
|
|
|
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Current liabilities: |
|
|
|
|
|
|||
Short-term bank loans |
38,102 |
|
|
67,219 |
|
|
822 |
|
Current maturities of bank loans |
24,965 |
|
|
45,441 |
|
|
24,105 |
|
Current maturities of bonds |
29,662 |
|
|
29,935 |
|
|
29,597 |
|
Financial derivative |
1,143 |
|
|
1,457 |
|
|
1,380 |
|
Current maturities of leases liabilities |
51,908 |
|
|
49,717 |
|
|
52,583 |
|
Trade payables |
203,982 |
|
|
189,469 |
|
|
168,637 |
|
Taxes on income payable |
29,729 |
|
|
33,155 |
|
|
35,182 |
|
Provision for restructuring plan |
3,563 |
|
|
3,715 |
|
|
3,574 |
|
Others accounts payable |
142,261 |
|
|
148,372 |
|
|
165,791 |
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Total current liabilities |
525,315 |
|
|
568,480 |
|
|
481,671 |
|
|
|
|
|
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|
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Non-current liabilities: |
|
|
|
|
|
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bank loans |
133,471 |
|
|
128,744 |
|
|
140,790 |
|
Severance pay liabilities, net |
5,434 |
|
|
5,901 |
|
|
5,327 |
|
Liabilities in respect of leases |
206,311 |
|
|
170,377 |
|
|
204,746 |
|
Other non-current liabilities |
53,441 |
|
|
59,769 |
|
|
53,241 |
|
Bonds |
94,996 |
|
|
127,812 |
|
|
96,496 |
|
Deferred taxes liabilities |
33,521 |
|
|
36,611 |
|
|
35,812 |
|
Financial derivative |
2,746 |
|
|
2,642 |
|
|
2,122 |
|
Total non-current liabilities |
529,920 |
|
|
531,856 |
|
|
538,534 |
|
Total liabilities |
1,055,235 |
|
|
1,100,336 |
|
|
1,020,205 |
|
|
|
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|
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Equity: |
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|
|
|
|
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Equity attributable to equity holders of the parent company: |
|
|
|
|
|
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Share capital |
23,714 |
|
|
23,714 |
|
|
23,714 |
|
Share premium |
126,219 |
|
|
128,070 |
|
|
127,861 |
|
Other capital reserves |
23,168 |
|
|
25,494 |
|
|
28,133 |
|
Retained earning |
573,560 |
|
|
512,316 |
|
|
571,846 |
|
|
(12,026 |
) |
|
(13,877 |
) |
|
(13,668 |
) |
|
734,635 |
|
|
675,717 |
|
|
737,886 |
|
Minority interests |
29,967 |
|
|
27,400 |
|
|
30,496 |
|
Total equity |
764,602 |
|
|
703,117 |
|
|
768,382 |
|
Total liabilities and equity |
1,819,837 |
|
|
1,803,453 |
|
|
1,788,587 |
|
|
Three months ended |
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|
2024 |
|
2023 |
||
|
(Unaudited) |
||||
|
Thousands of Dollars |
||||
|
Except for Earning Per Share data |
||||
|
|
|
|
||
|
|
|
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Sales |
450,779 |
|
|
442,457 |
|
Cost of sales |
260,280 |
|
|
269,546 |
|
Gross profit |
190,499 |
|
|
172,911 |
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% of sales |
42.3 |
% |
|
39.1 |
% |
Selling and marketing expenses |
134,811 |
|
|
129,639 |
|
% of sales |
29.9 |
% |
|
29.3 |
% |
General and administrative expenses |
26,407 |
|
|
23,330 |
|
% of sales |
5.9 |
% |
|
5.3 |
% |
Other Expenses (income), net and share in profits of associated company |
(69 |
) |
|
101 |
|
Operating income excluding non-core items |
29,350 |
|
|
19,841 |
|
% of sales |
6.5 |
% |
|
4.5 |
% |
Non-core items |
3,360 |
|
|
5,421 |
|
Operating income |
25,990 |
|
|
14,420 |
|
Finance expenses, net |
10,938 |
|
|
10,582 |
|
Income before tax on income |
15,052 |
|
|
3,838 |
|
Taxes on income |
3,003 |
|
|
823 |
|
Net income for the period |
12,049 |
|
|
3,015 |
|
Net income for the period excluding non-core items, net of tax |
14,486 |
|
|
7,772 |
|
|
|
|
|
||
|
|
|
|
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Attribution of net earnings for the period: |
|
|
|
||
Attributed to Company's shareholders |
10,339 |
|
|
2,117 |
|
Attributed to non-controlling interests |
1,710 |
|
|
898 |
|
|
12,049 |
|
|
3,015 |
|
|
|
|
|
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Net diluted earnings per share attributed to company's shareholders |
0.39 |
|
|
0.08 |
|
Net diluted earnings per share, before non-core items, net of tax, attributable to Company's shareholders |
0.49 |
|
|
0.26 |
|
|
|
|
Three months ended |
||||
|
2024 |
|
2023 |
||
|
(Unaudited) |
||||
|
Thousands of Dollars |
||||
|
|
|
|
||
|
|
|
|
||
Cash flows from operating activities: |
|
|
|
||
Net income for the period |
12,049 |
|
|
3,015 |
|
Adjustments required to reflect cash flows deriving from operating activities |
43,337 |
|
|
40,338 |
|
Interest paid in cash |
(8,522 |
) |
|
(12,431 |
) |
Interest received in cash |
1,234 |
|
|
1,099 |
|
Taxes on income paid in cash, net |
(12,524 |
) |
|
(8,253 |
) |
Net cash generated from operating activities |
35,574 |
|
|
23,768 |
|
|
|
|
|
||
Cash flows from investment activities: |
|
|
|
||
Change in short-term deposits, net |
- |
|
|
(602 |
) |
Purchase of fixed assets |
(12,295 |
) |
|
(5,228 |
) |
Purchase of intangible assets |
(17,364 |
) |
|
(1,276 |
) |
Proceeds from selling of fixed assets |
220 |
|
|
143 |
|
Others |
416 |
|
|
1,076 |
|
Net cash used in Investing activities |
(29,023 |
) |
|
(5,887 |
) |
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
||
Dividends paid to non-controlling interest holders in consolidated subsidiary |
(1,800 |
) |
|
(996 |
) |
Long term payables credit for fixed assets purchases |
(1,406 |
) |
|
(3,231 |
) |
Lease principal repayment |
(12,087 |
) |
|
(12,819 |
) |
Repayment of bonds |
- |
|
|
(15,140 |
) |
Dividend paid |
(9,021 |
) |
|
(8,018 |
) |
Receipt of a long-term loans from banking corporations |
543 |
|
|
- |
|
Repayment of long-term loans from banking corporations |
(6,154 |
) |
|
(1,905 |
) |
Short-term credit from banking corporations, net |
37,282 |
|
|
15,737 |
|
Others |
1,734 |
|
|
- |
|
Net cash generated from (used in) financing activities |
9,091 |
|
|
(26,372 |
) |
Net increase (decrease) in cash and cash equivalents |
15,642 |
|
|
(8,491 |
) |
|
|
|
|
||
Exchange rate differences and revaluation of cash and cash equivalents, net |
(2,736 |
) |
|
109 |
|
|
|
|
|||
Balance of cash and cash equivalents at the beginning of the period, net |
174,463 |
|
|
126,649 |
|
Balance of cash and cash equivalents at the end of the Period, net |
187,369 |
|
|
118,267 |
|
|
Three months ended |
||||
|
2024 |
|
2023 |
||
|
(Unaudited) |
||||
|
Thousands of Dollars |
||||
Adjustments required to reflect cash flows from operating activities: |
|
|
|
||
Revenues and expenses not involving cash flow: |
|
|
|
||
Depreciation |
8,331 |
|
|
9,366 |
|
Amortization |
17,610 |
|
|
16,127 |
|
Exchange rate losses |
410 |
|
|
67 |
|
Interest paid in cash |
5,798 |
|
|
10,200 |
|
Interest received in cash |
(1,234 |
) |
|
(1,099 |
) |
Taxes on income paid in cash, net |
12,524 |
|
|
8,253 |
|
Deferred taxes on income, net |
(4,545 |
) |
|
(2,611 |
) |
Interest due to lease agreements |
2,724 |
|
|
2,231 |
|
Severance pay liability, net |
187 |
|
|
(449 |
) |
Change in restructuring accrual |
(11 |
) |
|
874 |
|
Capital gain from sale of fixed assets |
(76 |
) |
|
(2 |
) |
Change to the benefit component of options granted to employees |
401 |
|
|
809 |
|
Share in profits of associated company accounted for using the equity method |
(60 |
) |
|
(64 |
) |
Others |
(1,241 |
) |
|
4,116 |
|
|
40,818 |
|
|
47,818 |
|
Changes to operating assets and liabilities: |
|
|
|
||
Decrease in trade receivables |
33,480 |
|
|
39,034 |
|
Increase in other receivable |
(1,777 |
) |
|
(8,306 |
) |
Increase (decrease) in trade payables |
35,460 |
|
|
(22,213 |
) |
Increase in other payables |
(28,330 |
) |
|
(28,755 |
) |
Decrease (Increase) in inventory |
(36,313 |
) |
|
12,760 |
|
|
2,519 |
|
|
(7,480 |
) |
|
43,337 |
|
|
40,338 |
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240522288626/en/
For more information:
+972-54-5201178
Nissim@unik.co.il
+1-212-994-4660
sberns@bcg-pr.com
Source: