HanesBrands acquisition drives Gildan's revenue surge

Canadian apparel manufacturer Gildan Activewear Inc. (Gildan) announced its financial results for the second quarter ended June 28, 2026. The Montreal-based business recorded net sales from continuing operations of 1.58 billion dollars, representing a 72.3 percent increase compared to 918.50 million dollars in the prior-year period.

The top-line expansion was primarily driven by the acquisition of US apparel brand HanesBrands Inc. (HanesBrands), partially offset by inventory optimization initiatives. Compared to proforma net sales of 1.72 billion dollars from continuing operations, sales declined due to lower volumes stemming from proactive inventory reductions across customer channels and the non-recurrence of pre-buying activity observed in Q2 2025.

Gildan president and chief executive officer Glenn J. Chamandy stated: “We delivered strong results this quarter as our teams continued to execute with discipline against our strategic priorities. We continue to make excellent progress integrating HanesBrands and capturing synergies, while leveraging the combined strength of our brands, manufacturing network, and commercial capabilities, and investing strategically in innovation”.

Segment operational performance and tariff refunds

Across sales channels, wholesale revenue decreased 1.5 percent year-over-year to 769.40 million dollars. Despite overall channel softness, brands such as Comfort Colors, American Apparel, and Champion generated double-digit sales growth YoY. Retail sales surged to 813.10 million dollars compared to 137.10 million dollars in Q2 2025, largely reflecting the inclusion of HanesBrands.

Gross profit reached 459.80 million dollars, or 29.1 percent of net sales, up from 289.40 million dollars, or 31.5 percent of net sales, in the year-ago period. Adjusted gross profit stood at 545.40 million dollars, or 34.5 percent of net sales, after adjusting for an 85.60 million dollar inventory fair value step-up cost.

Operating income for Q2 stood at 175.90 million dollars compared to 199.50 million dollars in Q2 2025. Adjusted operating income rose 68.8 percent YoY to 352.30 million dollars, yielding an adjusted operating margin of 22.3 percent. Diluted earnings per share from continuing operations were 0.49 dollars, while adjusted diluted earnings per share reached 1.28 dollars.

The company expects to receive 220 million dollars in International Emergency Economic Powers Act tariff refunds from US Customs and Border Protection in 2026, with 25 million dollars recorded in Q2 and the majority expected in the third quarter. A significant portion will be reinvested into brand building, retail marketing, and product innovation.

Divestment of Australian unit and full year outlook

Gildan has entered into a definitive agreement to sell HanesBrands Australia to Singapore-based investment entity BBFIT Investments Pte Ltd for an enterprise valuation of approximately 700 million Australian dollars. The transaction is expected to close in the second half of 2026, with net proceeds deployed to pay down outstanding bank debt.

The company updated its full year 2026 guidance, expecting revenue at the low end of its previously communicated range of 6.0 billion to 6.2 billion dollars. Full year adjusted operating margin is projected at approximately 21.8 percent, with adjusted diluted earnings per share anticipated between 4.65 and 4.75 dollars, representing a YoY increase of 32.5 percent to 35 percent.