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Gildan Activewear Q4 earnings grow 14 percent

By Prachi Singh

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Management

Gildan Activewear has said that for the year ended January 1, 2017, the company achieved diluted EPS of 1.47 dollars and adjusted EPS of 1.51 dollars, slightly above its previous guidance of adjusted EPS of 1.48 dollars to 1.50 dollars. Sales for the full year of 2.59 billion dollars, the company said, were in line with its previous sales guidance of approximately 2.6 billion dollars. The company also announced a 20 percent increase in the amount of its quarterly dividend.

Adjusted EPS of 0.32 dollar in the fourth quarter was up 14 percent on sales of 588 million dollars, which were up 8 percent over the fourth calendar quarter of 2015. The 8.1 percent increase in consolidated sales in the quarter compared to the corresponding quarter in 2015 reflected sales increases of 14.4 percent in the printwear segment and 1.2 percent in branded apparel.

Alstyle and Peds acquisitions drive Q4 sales growth

The company said, growth was primarily driven by the impact of the Alstyle and Peds acquisitions and organic unit sales volume growth in printwear, partly offset by the impact of significant retailer inventory destocking and the anticipated impact of the exit of private label programs in branded apparel, as well as lower net selling prices in printwear. The acquisitions of Alstyle and Peds contributed approximately 50 million dollars in sales in the fourth quarter of 2016.

Net earnings totaled 74.3 million dollars or 0.32 dollar per share on a diluted basis for the three months ended January 1, 2017 compared with net earnings of 67.6 million dollars or 0.28 dollar per share for the three months ended January 3, 2016. Excluding after-tax restructuring and acquisition-related costs of 0.2 million dollars in the quarter and 1.3 million dollars in the same quarter last year, Gildan said, it reported adjusted net earnings of 74.5 million dollars or 0.32 dollar per share on a diluted basis for the fourth quarter of 2016, up from 68.9 million dollars or 0.28 dollar per share in the prior year quarter.

The 14.3 percent increase in adjusted diluted EPS was primarily due to higher gross profit, an income tax recovery in the quarter, and the benefit of share repurchases during the year, partly offset by higher SG&A and financial charges.

Net earnings for 2016 were 346.6 million dollars or 1.47 dollars per share on a diluted basis compared to 346.1 million dollars or 1.42 dollars per diluted share for the same period of the prior year. Before reflecting after-tax restructuring and acquisition-related costs in both years, adjusted net earnings for 2016 were 356.3 million dollars slightly up from adjusted net earnings in calendar 2015. Adjusted diluted EPS for the year totaled 1.51 dollars per share, up 3.4 percent compared to adjusted diluted EPS of 1.46 dollars in the prior calendar year.

Expects 9 percent growth in FY17 earnings

For 2017, Gildan expects to achieve adjusted diluted EPS in the range of 1.60 dollars to 1.70 dollars, which at the mid-point of the guidance range represents growth of 9 percent over 2016 on projected high single digit consolidated net sales growth. Adjusted EBITDA is expected to be in the range of 555 to 585 million dollars.

Net sales in the printwear and branded apparel segments are each expected to increase in the high single digit range. For printwear sales, the Company is assuming overall unit sales volume growth, including continued penetration in the fashion and performance segments of the North American market, and double-digit international printwear shipment growth which is expected to more than offset the assumption of unfavourable foreign exchange impacts. Printwear sales in 2017 compared to the prior year are also expected to benefit from positive product-mix.

Projected sales growth in branded apparel reflects assumptions for sales growth from increased shelf space and new programs in the retail channel and favourable product-mix.

Picture:Gildan Activewear

Gildan Activewear