Gildan Activewear Inc. has announced that net sales for the second quarter ending July 4, 2021, totalled 747.2 million dollars, up 225.3 percent over the prior year, driven primarily by higher sales volumes and favourable product-mix.
The company’s activewear sales were 597.1 million dollars, up 353.7 percent over the prior year, while sales in the hosiery and underwear category of 150 million dollars were up 52.9 percent over the prior year driven by double digit POS growth in both socks and underwear, the non-recurrence of retailer inventory destocking and favourable product-mix.
“Our business continued to build momentum during the second quarter as economic activity in North America trended positively and the power of our Back to Basics strategy continued to drive stronger profitability,” said Gildan President and CEO, Glenn J. Chamandy. “Once again, our team demonstrated exceptional operational capability by delivering on our targets while navigating through a tight supply chain environment.”
Gildan’s sales performance against Q2 2019 The company added that sales in the quarter compared to pre-Covid levels in the second quarter of 2019 were down 6.8 percent, due primarily to lower activewear sales volumes, unfavourable mix and lower net selling prices in imprintables, offset in part by higher underwear sales volumes.
The company’s overall imprintables POS was down approximately 8 percent compared to the same period in 2019, with POS in North America down in the single-digit range, while POS in international imprintables markets down close to 30 percent compared to the same period in 2019.
Gildan’s operating results in the second quarter
In the second quarter of 2021, Gildan generated gross profit of 240.8 million dollars or 32.2 percent of sales and adjusted gross profit of 228.1 million dollars or 30.5 percent of sales. Gross margin and adjusted gross margin in the second quarter of 2021 were up 440 bps and 270 bps, respectively, from gross margin and adjusted gross margin of 27.8 percent.
The company generated operating income of 159.7 million dollars or 21.4 percent of sales and adjusted operating income of 148.6 million dollars or 19.9 percent of sales, in the second quarter of 2021 compared to an operating loss of 236.1 million dollars and 181.1 million dollars on an adjusted basis last year.
Gildan said, reported net earnings were 146.4 million dollars or 74 cents per share on a diluted basis and adjusted net earnings were 135.3 million dollars or 68 cents per share on a diluted basis, compared to a net loss of 249.7 million dollars or 1.26 dollars per diluted share and an adjusted net loss of 196.6 million dollars or 99 cents per diluted share, respectively, in the second quarter last year.
Compared to the second quarter of 2019, adjusted operating margin was 19.9 percent in the second quarter, up 360 bps from 16.3 percent, driven by stronger gross margin and SG&A performance. Adjusted diluted EPS growth was 21 percent compared to adjusted diluted EPS of 56 cents in the second quarter of 2019.
Gildan’s year-to-date operating performance
The company further said that net sales for the six months were 1,336.7 million dollars, up 94.1 percent over the same period last year, reflecting increases of 114.5 percent in activewear sales and 38.1 percent in the hosiery and underwear category.
The year-over-year increase in activewear sales where the company generated sales of 1,081.7 million dollars was primarily driven by volume increases in all channels and favourable product-mix. The increase in the hosiery and underwear category where Gildan generated sales of 255 million dollars in the first half reflected strong growth both in underwear and in sales of sock products, as well as favourable product mix.
The company generated gross profit of 429.3 million dollars or 32.1 percent of sales, and adjusted gross profit of 411.5 million dollars or 30.8 percent of sales compared to a gross loss of 41.9 million dollars and an adjusted gross loss of 7.9 million dollars for the same periods last year.
On a year-to-date basis, Gildan generated operating income of 273.5 million dollars or 20.5 percent of sales compared to an operating loss of 328.4 million dollars last year. Adjusted operating income totaled 258.8 million dollars or 19.4 percent of sales, compared to an adjusted operating loss of 161.2 million dollars last year.
The company reported net earnings of 245 million dollars or 1.23 dollars per share on a diluted basis and adjusted net earnings of 230.3 million dollars or 1.16 dollars per diluted share compared to a net loss of 349 million dollars or 1.76 dollars per diluted share, and an adjusted net loss of 185.4 million dollars or 93 cents per diluted share, respectively, in the same period last year.