TCF POST Report
Global apparel manufacturer Delta Galil Industries reported record second-quarter 2026 results, delivering strong revenue growth, improved profitability, and enhanced financial flexibility as operational gains combined with a one-time U.S. tariff refund.
The Israel-based company, a major supplier of intimate apparel, activewear, loungewear, socks, and denim for leading global brands, posted second-quarter sales of $511.6 million, up 9% year over year, while gross profit climbed 26% to a record $253.2 million. EBIT excluding non-core items surged 76% to $54.6 million, reflecting stronger factory efficiency, favorable product mix, and continued execution of strategic growth initiatives.
Excluding the impact of a $33 million U.S. tariff refund, the company still delivered record second-quarter sales, a record underlying gross margin of 45.2%, and double-digit growth across key profitability metrics, underscoring the strength of its core business.
CEO Isaac Dabah said the company plans to reinvest part of the tariff refund into expanding manufacturing capacity, strengthening supply chain capabilities, and supporting future growth initiatives. He attributed the underlying performance to continued investments in product innovation, owned brands, manufacturing flexibility, global sourcing, and distribution infrastructure.
For apparel industry stakeholders, Delta Galil’s results highlight continued resilience among diversified manufacturers with vertically integrated operations. The company’s gross margin expanded to 49.5%, aided by improved factory efficiency, favorable currency movements, a higher contribution from its higher-margin Israel operations, and the tariff refund. Excluding the refund, gross margin remained a robust 45.2%.
Cash generation also strengthened significantly. Operating cash flow, excluding IFRS 16, reached $56.8 million, compared with $13.0 million a year earlier, while net debt-to-EBITDA improved to 0.7x from 0.9x. The company ended the quarter with $122.9 million in cash and a record shareholders’ equity of $938.3 million, and declared an $8 million quarterly dividend.
Delta Galil reaffirmed its full-year 2026 outlook, projecting revenue between $2.294 billion and $2.328 billion and EBIT of $204 million to $212 million, excluding tariff refunds and non-core items.
The company serves major global retailers and brands including Nike, Victoria’s Secret, Lululemon, Skims, Walmart, and others, while also managing a portfolio of owned brands and licensed labels. Its vertically integrated manufacturing model continues to position the company to respond quickly to shifting consumer demand and evolving global sourcing requirements.