Delta Brands Reports Sales Growth and 27% Jump in Net Profit for Q2
Following a weak first quarter, Delta Brands, led by Anat Bogner, reported a strong second quarter with an 18% revenue increase to 310 million shekels and a 27% jump in net profit.
Following a weak first quarter, Delta Brands, managed by Anat Bogner, reported a positive second quarter with an increase in sales and a 27% jump in net profit. The franchised brands, Victoria's Secret and Bath & Body Works, contributed significantly through the opening of new stores.
The company's owned brands—Delta, Fix, and Panta Rei—grew organically, with increased revenues from identical stores and online platforms. The stock, traded on the Tel Aviv Stock Exchange, rose by approximately 6% following the financial results. Delta Brands is a subsidiary of Delta Galil, overseeing retail operations in Israel and Europe.
Revenue rose by 18% to 310 million shekels. This growth was driven by new store openings and the fact that the parallel quarter last year was negatively impacted by the "Iron Swords" operation.
Key performance metrics:
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Franchised brand revenues increased by 61.5%.
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Owned brand revenues grew by 9.5%.
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Sales in identical stores (excluding online sites and adjusting for 12 days of closures during the "Iron Swords" operation last year) grew by 3.2%.
Delta currently operates 244 stores. It plans to add 11 branches by year-end and reach 273 stores by the end of 2027, including 10 locations in Germany. The company also operates five dedicated e-commerce sites. The Bath & Body Works site now serves Germany, France, the Netherlands, Belgium, and Austria.
Gross profit rose by 19% to 201 million shekels, with gross profitability improving from 64.1% to 64.6% due to the strengthening of the dollar against the shekel. Operating profit increased by 28% to 51 million shekels. The company closed the quarter with a net profit of 37 million shekels, compared to 29 million shekels in the same period last year. Cash flow reached 80 million shekels, bolstered by inventory reduction.
"One of the parameters that affect the cash flow is the issue of inventory. Despite the challenges of the wars, the shipping times that have lengthened, and delays in the ports, we have reduced inventory balances by about 50 million shekels. Two-thirds of the decrease stems from a decrease in inventory quantities, and one-third from a change in exchange rates," Anat Bogner told investors.
