Delta Brands Reports 27% Net Profit Surge on Strong Q2 Sales Growth
Delta Brands, led by CEO Anat Bogner, posted a strong second quarter following a weak start to the year, with sales rising and net profit increasing by 27%. The company, a subsidiary of Delta Galil responsible for retail operations in Israel and Europe, saw revenues climb 18% to 310 million shekels. Growth was driven by franchise brands Victoria's Secret and Bath & Body Works opening new stores, alongside organic growth in company-owned brands Delta, Pex, and Panta Ray. Same-store sales rose 3.2% excluding online sales and a 12-day store closure during last year’s "Guardian of the Walls" operation, with franchise brand stores showing a 5.9% increase for the first time.
Delta Brands currently operates 244 stores across Israel and Europe, including all group brands, and plans to expand to 255 stores by year-end and 273 by 2027, including 10 stores in Germany up from three today. The Bath & Body Works online store launched earlier this year and serves five European countries. The company signed five lease agreements for new German stores, with two opened in March, one in June 2026, and two more expected this year. Online revenues, excluding Bath & Body Works, grew 7.3% in the quarter.
The strengthening US dollar against the shekel improved gross profit margins from 64.1% to 64.6%, lifting gross profit by 19% to 201 million shekels. Operating profit increased 28% to 51 million shekels, aided by higher sales and improved gross margins, as well as increased same-store sales which reduced marketing and sales expense ratios. Net profit reached 37 million shekels, up from 29 million shekels in the same quarter last year. Cash flow improved to 80 million shekels, helped by a 50 million shekel reduction in inventory despite challenges from war-related shipping delays and port congestion. Bogner highlighted inventory management as a key factor in cash flow improvement, attributing two-thirds of the reduction to lower stock volumes and one-third to currency exchange effects.
