Core Insights - Gildan Activewear's Q3 earnings exceeded expectations, with adjusted per-share earnings at $1, surpassing analysts' estimates of $0.98 [1] - The company reported a 2.2% year-on-year growth in Q3 sales, reaching $911 million, driven by a 5.4% increase in the activewear segment [2] - Despite the sales increase, net earnings declined from $131.5 million in Q3 2024 to $120.2 million in Q3 2025 [3] Sales Performance - Activewear sales contributed positively with a 5.4% year-on-year increase due to a favorable product mix and higher net prices [2] - Hosiery and underwear sales experienced a significant decline, dropping over 22% year-on-year to $80 million, attributed to weak demand and unfavorable product mix [2] Acquisition Plans - The company plans to acquire HanesBrands for $2.2 billion in cash and stock, expected to close in late 2025 or early 2026 [4] - The CFO expressed confidence in the acquisition as a beneficial path forward for Gildan [4][5] Financial Guidance - Gildan adjusted its guidance for the remainder of 2025, raising its projected adjusted operating margin increase from 50 basis points to 70 basis points [6] - The company expects capital expenditures to be 4% of sales, down from the previously projected 5% [6] Supply Chain Considerations - Companies are hesitant to shift their supply chains to Gildan's vertical factories due to tariff-related uncertainties [7] - The CEO noted that supply chain adjustments should not be knee-jerk reactions, emphasizing the potential for further optimization and exploration of new product categories [8]

Core Insights - Gildan Activewear reported Q3 net sales of $911 million, a 2.2% increase year-over-year, aligning with previous guidance for low single-digit growth [1] - Operating income decreased by 0.4% to $192.1 million, while net profit fell by 8.6% to $120.2 million compared to Q3 2024 [1] Sales Performance - Activewear sales reached $831 million, up 5.4%, driven by a favorable product mix and higher net prices [3] - Hosiery and underwear sales dropped to $80 million, a decline of 22.1% year-over-year, attributed to lower sales volumes and a timing shift of shipments [4] - International sales decreased to $60 million, down 6.1% year-over-year, primarily due to ongoing demand softness across markets [4] Strategic Outlook - Gildan's CEO highlighted the effectiveness of the Gildan Sustainable Growth strategy in driving financial performance and expressed optimism about future growth, particularly with the upcoming acquisition of Hanesbrands [2][3] - The company maintains its full-year revenue growth guidance at mid-single digits for 2025, despite a challenging macroeconomic environment [5] - The full-year adjusted operating margin is projected to increase by approximately 70 basis points, exceeding previous guidance of 50 basis points [6]

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Financial Data and Key Metrics Changes - The company reported third quarter sales of $911 million, a 2.2% year-over-year increase, aligning with previous guidance of low single-digit growth [10] - Activewear sales increased by 5.4%, driven by a favorable product mix and higher net prices [10] - Adjusted operating margins improved to 23.2%, reflecting an 80 basis point year-over-year increase, resulting in record adjusted diluted EPS of $1.00, up 17.6% from the previous year [5][15] Business Line Data and Key Metrics Changes - Sales in the hosiery underwear category decreased by 22% year-over-year, attributed to a timing shift of shipments and broader market weakness [11] - The Comfort Colors brand performed well, celebrating its 50th anniversary, and contributed to overall sales growth [7] - The company introduced new brands such as All Pro and Champion, which are expected to drive further growth [6] Market Data and Key Metrics Changes - International sales declined by $4 million, or 6.1% year-over-year, primarily due to ongoing demand softness across markets [11] - Sales to North American distributors remained solid, supported by sustained momentum from national account customers [10] Company Strategy and Development Direction - The company is focused on executing its Gildan Sustainable Growth (GSG) strategy, leveraging a large-scale, low-cost, vertically integrated manufacturing network [8] - The proposed acquisition of Hanesbrands is expected to close late this year or early 2026, with anticipated run-rate synergies of at least $200 million [8] - The company is capitalizing on its largest innovation pipeline in history, with more product launches planned for 2025 and 2026 [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong financial performance despite a fluid macroeconomic environment [5] - The outlook for 2025 includes revenue growth in the mid-single digits and an increase in adjusted operating margins by approximately 70 basis points [18] - Management noted that the market remains stable, with expectations for growth in the innerwear category in Q4 [24][46] Other Important Information - The company generated approximately $189 million in free cash flow in the first nine months of 2025, with $200 million generated in the third quarter [16] - The company ended the quarter with net debt of about $1.7 billion, maintaining a leverage ratio of 2x net debt to trailing twelve months Adjusted EBITDA [16] Q&A Session Summary Question: Can you discuss the weakness in the Underwear business and market share? - Management noted that the innerwear business faced delays in floor sets by large retailers and inventory management issues due to tariffs [23] - They expect a return to growth in Q4, with a stable market outlook [24] Question: What is driving the change in free cash flow guidance? - The change is attributed to transaction costs related to the Hanesbrands acquisition and timing issues with working capital [29] Question: How is the Fleece business trending with changing weather? - The Fleece business is performing well, with sales meeting expectations as the season progresses [38] Question: What is the competitive landscape like regarding tariffs? - Management indicated that there is uncertainty in the market, but they are well-positioned to optimize their supply chain and capitalize on opportunities [40] Question: Can you comment on inventory levels and tariff costs? - Inventory levels are slightly higher due to tariff costs, but the company is well-positioned for availability and control of working capital [81] Question: How will the Hanesbrands acquisition impact organic growth? - The company anticipates net sales to grow at a rate of 3%-5% CAGR over the next three years post-acquisition [85]

Financial Data and Key Metrics Changes - The company reported third quarter sales of $911 million, a 2.2% year-over-year increase, aligning with previous guidance of low single-digit growth [10] - Activewear sales increased by 5.4%, driven by favorable product mix and higher net prices [10] - Adjusted operating margins improved to 23.2%, reflecting an 80 basis point increase year-over-year [12] - Record adjusted diluted EPS of $1.00 was achieved, marking a 17.6% increase compared to the same period last year [5][14] Business Line Data and Key Metrics Changes - Sales in the hosiery underwear category decreased by 22% year-over-year, attributed to shipment timing shifts and broader market weakness [11] - The Comfort Colors brand performed well, celebrating its 50th anniversary, and contributed to overall sales growth [7] - The company introduced new brands such as AllPro and Champion, which are expected to drive future growth [6][10] Market Data and Key Metrics Changes - International market sales declined by $4 million, or 6.1% year-over-year, primarily due to ongoing demand softness [11] - Sales to North American distributors remained solid, supported by sustained momentum from national account customers [10] Company Strategy and Development Direction - The company is focused on executing its Gildan Sustainable Growth (GSG) strategy, emphasizing operational agility and innovation [16] - Plans for the integration of the proposed acquisition of HanesBrands are underway, with expected run-rate synergies of at least $200 million [8] - The company aims to capitalize on its largest innovation pipeline in history, with more product launches planned for 2025 and 2026 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong financial performance despite a fluid macroeconomic environment [5][18] - The outlook for 2025 includes revenue growth in the mid-single digits and an increase in adjusted operating margins by approximately 70 basis points [17] - Management noted that the market remains stable, with expectations for growth in the innerwear category in Q4 [23][45] Other Important Information - The company announced a private placement offering of $1.2 billion in senior unsecured notes to fund the proposed acquisition of HanesBrands [14] - Operating cash flow for the first nine months of 2025 was $270 million, with free cash flow guidance updated to approximately $400 million [15][17] Q&A Session Summary Question: Can you talk about the weakness in the Underwear business and market share? - Management noted that the innerwear business faced delays in floor sets by large retailers and inventory management issues due to tariffs [22] - They expect a return to growth in Q4, with a stable market outlook [23][24] Question: What is driving the change in free cash flow guidance? - The decrease in free cash flow guidance is attributed to transaction costs related to the HanesBrands acquisition and timing of working capital [28] Question: How is the fleece business trending? - The fleece business is performing well, with sales meeting expectations as the season progresses [37] Question: What is the competitive landscape like? - Management indicated that the competitive landscape remains stable, with no significant changes observed in recent quarters [97]

Financial Data and Key Metrics Changes - The company reported third quarter sales of $911 million, a 2.2% year-over-year increase, aligning with previous guidance of low single-digit growth [8] - Activewear sales grew by 5.4%, driven by favorable product mix and higher net prices [8] - Adjusted operating margins improved to 23.2%, reflecting an 80 basis point increase year-over-year [11] - Record adjusted diluted EPS of $1.00 was achieved, marking a 17.6% increase compared to the same period last year [4][12] Business Line Data and Key Metrics Changes - Sales in the hosiery underwear category decreased by 22% year-over-year, attributed to shipment timing shifts and broader market weakness [9] - The Comfort Colors brand performed well, celebrating its 50th anniversary and contributing to overall sales growth [5] - The company introduced new brand offerings such as AllPro and Champion, which are expected to drive future growth [4][5] Market Data and Key Metrics Changes - International market sales declined by $4 million, or 6.1% year-over-year, primarily due to ongoing demand softness [9] - Sales to North American distributors remained solid, supported by sustained momentum from national account customers [8] Company Strategy and Development Direction - The company is focused on executing its Gildan Sustainable Growth (GSG) strategy, which emphasizes operational agility and innovation [15] - Plans for the integration of the proposed acquisition of HanesBrands are underway, with expected run-rate synergies of at least $200 million [6] - The company aims to capitalize on its large-scale, low-cost, vertically integrated manufacturing network to enhance competitive positioning [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong financial performance despite a fluid macroeconomic environment [4][15] - The outlook for 2025 includes revenue growth in the mid-single digits and an increase in adjusted operating margins by approximately 70 basis points [15][16] - Management anticipates a stable market for the innerwear business, expecting growth to return in Q4 [23] Other Important Information - The company generated approximately $189 million in free cash flow in the first nine months of 2025, with $200 million generated in the third quarter [13] - The company ended the quarter with net debt of about $1.7 billion, maintaining a leverage ratio of 2 times net debt to trailing twelve months adjusted EBITDA [13] Q&A Session Summary Question: Can you discuss the weakness in the Underwear business and market share? - Management noted that the innerwear business faced delays in floor sets by large retailers and inventory management issues due to tariff impacts. They expect growth to return in Q4 [21][23] Question: Can you elaborate on the free cash flow guidance update? - The guidance was revised lower primarily due to higher working capital investments and transaction costs related to the HanesBrands acquisition [26][27] Question: What is the outlook for the fleece business and demand? - The fleece business is performing well, with early sales meeting expectations. Management noted that the season for fleece is just beginning [35][36] Question: How is the competitive landscape evolving? - The market has generally passed on tariff-related costs, and the company continues to strengthen its position through brand strength and innovation [100]

Core Insights - Gildan Activewear reported quarterly earnings of $1 per share, exceeding the Zacks Consensus Estimate of $0.98 per share, and up from $0.85 per share a year ago, representing an earnings surprise of +2.04% [1] - The company posted revenues of $910.6 million for the quarter ended September 2025, which was 0.7% below the Zacks Consensus Estimate, but an increase from $891.1 million year-over-year [2] - Gildan shares have increased approximately 30.2% year-to-date, outperforming the S&P 500's gain of 17.2% [3] Earnings Outlook - The future performance of Gildan's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.93 on revenues of $884.8 million, and for the current fiscal year, it is $3.46 on revenues of $3.42 billion [7] Industry Context - The Textile - Apparel industry, to which Gildan belongs, is currently ranked in the bottom 19% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of Gildan's stock may also be influenced by the overall outlook for the industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Core Insights - Gildan Activewear has narrowed its expectations for the year due to weaker demand and increased tariff costs following a decline in third-quarter profits [1] Group 1: Financial Performance - The company reported a decrease in third-quarter profits, prompting a revision of its financial outlook for the year [1] Group 2: Market Conditions - Weaker demand in the market has been identified as a significant factor affecting the company's performance [1] - Increased tariff costs are also impacting the company's financial results and expectations [1]