Gildan Activewear reports Q4 sales growth of 4.8 percent

Fourth quarter net sales at Gildan Activewear Inc. of 690.2 million dollars were up 4.8 percent, consisting of activewear sales of 537.9 million dollars, up 11.3 percent and sales of 152.3 million dollars in the hosiery and underwear category, down 13 percent compared to the prior year quarter. The company said, increased activewear sales reflected favourable imprintables product-mix, higher imprintables volume growth in North America and higher unit sales of activewear through retail channels, partly offset by lower international shipments.

“Our Back to Basics strategy put us on a sound footing going into the pandemic and the additional actions we have taken during 2020 have enhanced our competitive positioning as we work towards a stronger environment, growth, and achieving our long-term profitability targets” said Glenn J. Chamandy, President and CEO of Gildan in a statement.

Gildan’s fourth quarter highlights

Reported gross margin in the fourth quarter was 22.5 percent compared to 17.9 percent in the fourth quarter of 2019, while adjusted gross margin totalled 25.8 percent, up 20 basis points compared to 25.6 percent last year.

In the fourth quarter, the company reported GAAP diluted EPS of 34 cents and adjusted diluted EPS of 45 cents. Operating income was 78.8 million dollars in the fourth quarter, up from 24.3 million dollars last year. On an adjusted basis, operating income was 105.7 million dollars, up from 95.3 million dollars last year.

Review of Gildan’s full year results

Net sales for 2020 totalled 1,981.3 million dollars, down 29.8 percent from the prior year, reflecting declines of 33.8 percent in activewear and 14.1 percent in the hosiery and underwear category.

Full year gross profit totalled 249.1 million dollars and adjusted gross profit was 305.7 million dollars compared to 704.5 million dollars and 759.5 million dollars, respectively, in 2019.

Gildan said imprintables POS is currently tracking slightly weaker than during the fourth quarter, down 10 percent to 15 percent in the U.S. and international markets compared to 2019 levels, due to the impact of renewed winter lockdowns in many jurisdictions. In retail, the company continues to see year-over-year growth in activewear and underwear sales, however, sales in the sock category continue to be down. Consequently, while it expects higher overall sales in 2021 compared to 2020, the company remains cautious with expectations for 2021 given the evolution of the Covid-19 pandemic and ongoing restrictions on social gatherings.

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