Gildan Activewear first quarter net sales improve 15.9 percent

Gildan today reported net earnings of 56 million dollars or 0.23 dollar per share on a diluted basis for the three months ended April 5, 2015, compared with net earnings of 79.2 million dollars or 0.32 dollar per share in the corresponding quarter last year. Before reflecting minor restructuring and acquisition-related costs, Gildan reported adjusted net earnings of 57.5 million dollars or 0.24 dollar per share, compared with adjusted net earnings of 79.2 million dollars or 0.32 dollar per share for the same period last year.

Consolidated net sales in the first calendar quarter of 2015 amounted to 636.2 million dollars, up 15.9 percent from 548.8 million dollars in the corresponding quarter of the prior year, reflecting an increase of approximately 14 percent in printwear sales and sales growth of approximately 20 percent in branded apparel. Consolidated net sales in the quarter were in line with the company’s guidance of net sales in excess of 630 million dollars. The EPS impact of higher sales revenues was more than offset by lower gross margins in both operating segments.

Net sales for the printwear segment amounted to 431.3 million dollars, up 52.8 million dollars or 13.9 percent from 378.5 million dollars in the corresponding quarter of the prior year. The increase in printwear segment sales in the quarter was due to strong unit sales volume growth in US and international printwear markets and more favourable product-mix. Printwear sales reflected good growth in sales of high-valued activewear products, partially due to seasonally colder weather. Printwear sales included approximately one month of sales for Comfort Colors, which was acquired on March 2, 2015. International printwear sales were up 25 percent due to continuing penetration in Europe and Asia and the company’s recent entry into new markets in Latin America.

Net sales for branded apparel were 204.9 million dollars, up 20.3 percent from 170.3 million dollars in the same quarter of last year. The increase in branded apparel sales was due to organic sales growth of Gildan and Gold Toe branded programs, as well as licensed and global lifestyle brands and the acquisition of Doris, partially offset by lower sales of private label and retailer inventory destocking. Sales of Gildan branded products increased by approximately 20 percent. Sales of Gold Toe branded products also increased by approximately 12 percent. Sales of Gildan and Gold Toe branded products included strong growth in activewear.

The company narrowed its guidance range for adjusted diluted EPS for the 12 months ending January 3, 2016 to 1.50 dollars –1.55 dollars compared with its initial guidance of 1.50 dollars–1.57 dollars, to reflect the impact of the further devaluation of international currencies relative to the US dollar. The Company continues to project consolidated net sales slightly in excess of 2.65 billion dollars. Sales growth in printwear is projected to be approximately 12 percent compared to calendar 2014, including the impact of the acquisition of Comfort Colors, and sales growth in branded apparel is projected to be in excess of 20 percent. Adjusted EBITDA is now projected to be 525 dollars–540 million dollars for the 12 months ending January 3, 2016. The company is projecting adjusted EPS of 0.43 dollars- 0.45 dollars for the June quarter.