Net sales for the first quarter at Gildan Activewear Inc. of 589.6 million dollars were up 28.4 percent compared to the first quarter of 2020, consisting of activewear sales of 484.6 million dollars, up 30.1 percent and sales of 105 million dollars in the hosiery and underwear category, up 21.4 percent.
“Our first quarter results reflected a strong start to 2021 as continued benefits from our Back to Basics strategy supported sell-through across all channels and drove strong operating margin performance, allowing us to deliver net earnings significantly above prior year and first quarter 2019 levels” said Gildan President and CEO, Glenn J. Chamandy.
Imprintables and underwear categories drive sales increase
The company said in a release that the increase in activewear sales was driven by double-digit unit sales volume growth in North American and international imprintables markets and activewear sold in retail channels, as well as favourable product-mix, partly offset by lower net selling prices. Compared to the first quarter of 2019, POS in the U.S. and international markets remained relatively stable, down 10 percent to 15 percent over 2019.
The increase in the hosiery and underwear category, Gildan added, was driven by the strength of our underwear sales, which reflected strong double-digit volume growth over both the first quarters of 2020 and 2019.
Gildan posts earnings growth in Q1
Reported gross margin in the first quarter was 32 percent compared to gross margin of 23.2 percent in the first quarter of 2020, while adjusted gross margin totalled 31.1 percent in the quarter, up 650 bps.
The company generated operating income of 113.8 million dollars or 19.3 percent of sales compared to an operating loss of 92.3 million dollars last year. Adjusted operating income totalled 110.3 million dollars or 18.7 percent of sales compared to 19.9 million dollars or 4.3 percent of sales, last year.
The company reported net earnings of 98.5 million dollars or 50 cents per share on a diluted basis, for the three months ended April 4, 2021 and adjusted net earnings of 95 million dollars or 48 cents per share on a diluted basis, compared to a net loss of 99.3 million dollars or 50 cents per diluted share, and adjusted net earnings of 11.2 million dollars or 6 cents per diluted share, respectively, in the first quarter last year.
The company’s board of directors has declared a cash dividend of 154 cents per share, payable on June 21, 2021 to shareholders of record as of May 27, 2021.