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Gildan Activewear Q4 net sales increase 14 percent

By Prachi Singh

23 Feb 2022

Business

Image: Gildan Activewear Inc.

Gildan Activewear Inc. net sales for the fourth quarter ending January 2, 2022, of 784 million were up 14 percent over the prior year, consisting of activewear sales of 627 million dollars, up 17 percent and sales of 157 million dollars in the hosiery and underwear category, up 3 percent compared to the prior year quarter.

Gildan has also announced the appointment of Dhaval Buch to the company’s board of directors. With the appointment of Buch, the company’s board now comprises eleven members. He will serve on the board’s corporate governance and social responsibility committee.

“We ended the year with a strong finish, growing above pre-pandemic levels and setting record results to build on. We generated record sales for the fourth quarter of 784 million dollars, up 14 percent over the prior year and 19 percent above the fourth quarter of 2019. Strong sales and margin performance translated to record earnings for the quarter with GAAP diluted EPS of 89 cents, and adjusted diluted EPS of 76 cents which was up 69 percent over last year and 85 percent from the same quarter in 2019,” said Glenn J. Chamandy, president and CEO of Gildan.

Highlights of Gildan’s fourth quarter results

Compared to 2019, net sales in the quarter were up 19 percent driven by strong performance in activewear.

The company generated gross profit of 229 million dollars in the fourth quarter, and adjusted gross profit1 of 240 million dollars up 48 percent and 35 percent, respectively, over the prior year, driven by our growth in sales and strong margin performance. Gross margin of 29.2 percent in the quarter was up 670 basis points over 2020, while adjusted gross margin of 30.6 percent was up 480 basis points compared to 25.8 percent last year.

Operating income in the fourth quarter of 177 million dollars or 22.6 percent of sales, was up from 79 million dollars or 11.4 percent of sales last year. On an adjusted basis, operating income was 160 million dollars or 20.4 percent of sales, compared to 106 million dollars or 15.3 percent of sales, in the fourth quarter of 2020.

The company reported net earnings of 174 million dollars or 89 cents per diluted share, for the fourth quarter and adjusted net earnings of 149 million dollars or 76 cents per diluted share. This compared to net earnings of 67 million dollars or 34 cents per diluted share, and adjusted net earnings of 90 million dollars or 45 cents per diluted share, respectively, in the fourth quarter last year.

Gildan Activewear’s full year net sales up 48 percent

The company delivered net sales of 2,923 million dollars in 2021, up 48 percent from the prior year, reflecting increases of 58 percent to 2,365 million dollars in activewear and 16 percent to 558 million dollars in the hosiery and underwear category compared to 2020.

The company generated gross profit of 940 million dollars and gross margin of 32.2 percent compared to 249 million dollars and 12.6 percent, respectively, in the prior year. On an adjusted basis, gross profit for 2021 totaled 903 million dollars compared to 306 million dollars in the prior year, resulting in adjusted gross margin in 2021 more than doubling to 30.9 percent from 15.3 percent in 2020.

For the full year, the company reported net earnings of 607 million dollars or 3.07 dollars per share on a diluted basis, and adjusted net earnings of 538 million dollars or 2.72 dollars per diluted share. This compared to a net loss of 225 million dollars or 1.14 dollars per diluted share and an adjusted net loss of 36 million dollars or 18 cents per diluted share in 2020.

The company’s board of directors has approved a 10 percent increase in the amount of the current quarterly dividend and has declared a cash dividend of 169 cents per share, payable on April 11, 2022, to shareholders of record on March 17, 2022.

Gildan appoints Dhaval Buch to its board of directors

Buch, the company said, is currently a senior advisor for Blackstone Private Equity, a leading global investment business and to the Mahindra Group, a large India-headquartered multinational with interests in automobile, farm and finance industries.

“Dhaval is an accomplished business leader and his international expertise in supply chain operations and extensive knowledge in sustainable sourcing makes him an ideal addition to our board,” said Gildan’s board chairman, Donald C. Berg.

Prior to this, Buch had a 35-year career as a business leader with Unilever where he last served as the global chief procurement officer for the company. In his career with Unilever, Buch also ran the Unilever Supply Chain for Asia and Africa. Before that, he held positions of increasing responsibility in Hindustan Unilever Limited, a listed Unilever subsidiary in India, culminating in his running the Supply Chain for South Asia and serving as an executive director on the board of Hindustan Unilever Limited.

Gildan Activewear