Delta Galil Posts 4% Sales Growth, Record 42.5% Margin but Profit Dips
Delta Galil, a major Nike supplier, posted FY25 sales of $2.12bn (up 4%) and record gross margin of 42.5%, boosting supply reliability and potential cost efficiency for Nike. However, EBIT excluding non-core items fell to $174.2m and net income slid to $93.7m, signaling some supplier profit pressure.
1. Full-Year Sales and Margin Growth
Delta Galil achieved record full-year sales of $2.12bn in FY25, up 4% from $2.05bn, while gross profit climbed 5% to $900.3m and gross margin expanded by 60 basis points to 42.5%.
2. Profitability Declines Slightly
EBIT excluding non-core items declined to $174.2m from $184.1m a year earlier, and net income slipped to $93.7m, resulting in diluted EPS of $3.21 versus $3.29 in FY24.
3. Fourth Quarter Performance
In Q4, sales rose 2% to $611.1m, gross profit increased 5% to $263.2m with margin up 140 basis points to 43.1%, yet EBIT ex-core fell to $59.3m and net EPS dropped to $0.93 from $1.00.
4. Implications for Nike Supply Chain
As a key supplier to Nike, Delta Galil’s improved factory efficiencies, higher DTC sales and margin expansion could support more stable sourcing costs for Nike, although tariff headwinds and reduced supplier profitability may pose risks.