Company Overview - Gildan Activewear Inc. is a leading manufacturer of everyday basic apparel, offering products such as activewear, underwear, and socks to a diverse customer base including wholesale distributors, screenprinters, retailers, and global lifestyle brand companies [2] - The company markets its products across North America, Europe, Asia Pacific, and Latin America under a portfolio of brands including Gildan, American Apparel, Comfort Colors, GOLDTOE, and Peds, as well as through an exclusive licensing agreement for the printwear channel for Champion [2] Manufacturing and ESG Practices - Gildan operates large-scale, vertically integrated manufacturing facilities primarily located in Central America, the Caribbean, North America, and Bangladesh [3] - The company is committed to industry-leading labor, environmental, and governance practices throughout its supply chain, which is part of its comprehensive ESG program embedded in its long-term business strategy [3] Upcoming Financial Results - Gildan will report its first quarter 2025 financial and operating results on April 29, 2025, with a press release issued after market close [1] - A conference call to discuss the results is scheduled for the same day at 5:00 PM ET, accessible via specific dialing instructions [1]

Core Viewpoint - Wall Street is facing significant losses due to uncertainty surrounding the new U.S. administration's economic tariffs, which are anticipated to increase consumer prices and negatively impact spending and the overall U.S. economy [1] Group 1: Market Trends - Investors are adopting a defensive stance, focusing on products that provide stability and safety in a volatile market, leading to increased interest in dividend stocks [2] - Dividend stocks are recognized for their ability to provide consistent income, which is crucial for wealth creation when equity market returns are uncertain [2] Group 2: Investment Strategy - Selecting stocks with a history of dividend growth can lead to a healthier portfolio with better capital appreciation potential compared to merely high-yield dividend stocks [3] - Stocks with strong dividend growth histories are typically from mature companies, making them less vulnerable to market fluctuations and providing a hedge against economic and political uncertainties [4] Group 3: Stock Selection Criteria - Key criteria for selecting dividend growth stocks include: - 5-Year Historical Dividend Growth greater than zero, indicating a solid dividend growth history [6] - 5-Year Historical Sales Growth greater than zero, reflecting strong revenue growth [7] - 5-Year Historical EPS Growth greater than zero, showing solid earnings growth [7] - Next 3-5 Year EPS Growth Rate greater than zero, suggesting expected earnings growth to sustain dividend payments [7] - Price/Cash Flow less than the industry average, indicating undervaluation [8] - 52-Week Price Change greater than the S&P 500, ensuring better performance over the past year [8] - Top Zacks Rank of 1 (Strong Buy) or 2 (Buy), indicating strong potential for outperformance [8] - Growth Score of B or better, which, when combined with a strong Zacks Rank, offers the best upside potential [9] Group 4: Featured Stocks - Tapestry, Inc. (TPR) has an estimated earnings growth rate of 14.4% for the fiscal year ending June 2025 and a Zacks Rank 1 with a Growth Score of A [10] - Gildan Activewear Inc. (GIL) has an estimated earnings growth rate of 16% for this year and a Zacks Rank 2 with a Growth Score of B [11] - Broadcom Inc. (AVGO) has an expected earnings growth rate of 35.5% and a Zacks Rank 2 with a Growth Score of A [12]

Core Insights - Gildan Activewear Inc. will participate in the 28th Annual CIBC Retail and Consumer Conference in Toronto on March 26, 2025, with key executives attending [1] Company Overview - Gildan is a leading manufacturer of everyday basic apparel, offering products such as activewear, underwear, and socks to a diverse customer base including wholesale distributors, screenprinters, retailers, and global lifestyle brands [2] - The company markets its products across North America, Europe, Asia Pacific, and Latin America under various owned brands, including Gildan, American Apparel, Comfort Colors, GOLDTOE, and Peds, as well as through an exclusive licensing agreement for Champion in the printwear channel [2] Manufacturing and ESG Practices - Gildan operates large-scale, vertically integrated manufacturing facilities primarily located in Central America, the Caribbean, North America, and Bangladesh [3] - The company is committed to industry-leading labor, environmental, and governance practices throughout its supply chain, which is part of its comprehensive ESG program integrated into its long-term business strategy [3]

Core Viewpoint - Gildan Activewear Inc. has announced the pricing of a C$700 million offering of senior unsecured notes in three series, aimed at repaying existing debt and for general corporate purposes [1][3]. Group 1: Offering Details - The offering consists of C$150 million of floating rate senior unsecured notes due March 13, 2028, C$200 million of 3.630% fixed rate senior unsecured notes due March 13, 2028, and C$350 million of 4.149% fixed rate senior unsecured notes due November 22, 2030 [1][2]. - The 2028 Floating Rate Notes will bear interest at a rate equal to daily compounded CORRA plus 1.26% per annum, payable quarterly starting June 13, 2025 [2]. - The 2028 Fixed Rate Notes will have a fixed interest rate of 3.630% per annum, payable semi-annually starting September 13, 2025 [2]. - The 2030 Fixed Rate Notes will be issued at $999.89 per $1,000 principal amount and will bear interest at 4.149% per annum, payable semi-annually starting November 22, 2025 [2]. Group 2: Use of Proceeds - The net proceeds from the offering will be used for the repayment of indebtedness under credit facilities and for other general corporate purposes [3]. Group 3: Underwriting and Ratings - The offering is being managed by a syndicate of agencies including BMO Capital Markets, CIBC Capital Markets, and TD Securities as joint bookrunners, with additional co-managers [4]. - The Notes have been assigned a provisional rating of BBB with a stable trend by DBRS Limited [5]. Group 4: Company Overview - Gildan is a leading manufacturer of everyday basic apparel, including activewear, underwear, and socks, marketed under various brands [10]. - The company operates large-scale manufacturing facilities primarily located in Central America, the Caribbean, North America, and Bangladesh, with a strong commitment to ESG practices [11].

Core Viewpoint - Gildan Activewear Inc. (GIL) is experiencing significant growth, nearing its 52-week high, driven by market share expansion, strong sales growth, and operational efficiency [1][2]. Financial Performance - Gildan's fourth-quarter 2024 earnings report exceeded market expectations, showcasing robust revenue growth and margin expansion [2][8]. - Adjusted EPS increased by 10.7% year over year, while revenues grew by 5% [8]. - International sales surged by 20% for the second consecutive quarter, driven by strong demand in Europe [8]. - The Activewear segment grew by 11%, benefiting from increased sales volumes and innovative product launches [9]. - Gross margin improved to 30.8%, reflecting a 60-basis-point increase due to lower raw material costs [10]. Strategic Initiatives - Gildan's Sustainable Growth Strategy (GSG) has been pivotal in accelerating growth and enhancing consumer engagement [3][10]. - The company has optimized its global manufacturing footprint and captured market share in key growth categories [10]. - A new manufacturing complex in Bangladesh is fully operational, enhancing cost efficiency and global flexibility [11]. Future Outlook - For 2025, net sales growth is expected to be in the mid-single digits, with adjusted operating margin projected to improve by 50 basis points [12]. - Adjusted earnings are anticipated to be between $3.38 and $3.58 per share, indicating a year-over-year increase of 13-19% [12]. - Free cash flow is projected to exceed $450 million [12]. - The Zacks Consensus Estimate for EPS has seen upward revisions, indicating expected growth rates of around 4.4% and 5.8% for the current and next fiscal years, respectively [16]. Market Position - Gildan has demonstrated strong market momentum, outperforming the industry and the S&P 500 over the past six months [3][5]. - The stock is trading above its 50-day and 200-day moving averages, indicating robust upward momentum [5].

Core Viewpoint - Growth investors are attracted to stocks with above-average financial growth, but identifying such stocks can be challenging due to their inherent risks and volatility [1] Group 1: Company Overview - Gildan Activewear (GIL) is highlighted as a recommended growth stock due to its favorable Growth Score and top Zacks Rank [2] - The company has a historical EPS growth rate of 72.7%, with a projected EPS growth of 16.1% this year, significantly outperforming the industry average of 7.7% [4] Group 2: Financial Metrics - Gildan's year-over-year cash flow growth stands at 9.3%, which is notably higher than the industry average of -9.9% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 4.8%, compared to the industry average of 3.6% [6] Group 3: Earnings Estimates - The current-year earnings estimates for Gildan have been revised upward, with the Zacks Consensus Estimate increasing by 3% over the past month [7] - Gildan has achieved a Zacks Rank of 2 (Buy) and a Growth Score of B, positioning it well for potential outperformance [9]

Group 1 - The core investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [1] - The articles emphasize understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations will be holds, indicating a cautious approach to investment opportunities, with only a small fraction of companies deemed suitable for buying at any given time [1] Group 2 - The articles aim to provide important information for future investors and introduce a healthy skepticism towards a generally bullish market [1] - There is a clear distinction made between the author's opinions and professional investment advice, highlighting the need for readers to conduct their own due diligence [2][3]

Core Insights - Gildan Activewear Inc. reported strong fourth-quarter 2024 results, with revenues and earnings exceeding expectations and showing year-over-year growth, driven by the execution of its GSG strategy [1][2] Financial Performance - Adjusted earnings were 83 cents per share, beating the Zacks Consensus Estimate of 80 cents, and increased by 10.7% from 75 cents in the prior-year quarter [2] - Net sales reached $821.5 million, a 5% year-over-year increase, surpassing the Zacks Consensus Estimate of $793 million [2] - Activewear sales totaled $714.1 million, marking a 10.9% year-over-year increase, supported by higher sales volumes and market share gains [3] - Hosiery and Underwear category net sales declined 22.6% year over year to $107.4 million, primarily due to the Under Armour phase-out, but excluding this impact, sales increased in the high-single digits [4] Regional Performance - U.S. sales increased by 4.4% to $730.6 million from $699.5 million in the prior year [6] - Canadian sales declined by 10.7% to $26.5 million from $29.7 million [6] - International sales grew by 20.3% to $64.4 million from $53.5 million in the previous year [6] Margins and Costs - Adjusted gross profit was $253 million, up 6.9% year over year, with an adjusted gross margin increase of 60 basis points to 30.8% due to lower raw material costs [7] - Adjusted SG&A expenses declined by 5% year over year to $77.9 million, with a 100 basis point decrease as a percentage of net sales [7] - Adjusted operating income improved by 13.3% to $175.1 million, with an adjusted operating margin increase of 160 basis points to 21.3% [8] - Adjusted EBITDA totaled $208.4 million, representing a year-over-year increase of 12.4%, with an adjusted EBITDA margin expansion of 170 basis points to 25.4% [8] Other Financials - Cash and cash equivalents at the end of the quarter were $98.8 million, with long-term debt of $1.24 billion and stockholders' equity of $1.46 billion [9] - Cash flows from operating activities were $210.5 million [9] 2025 Outlook - For 2025, net sales growth is expected to be in the mid-single digits year over year, with an adjusted operating margin projected to improve by 50 basis points [10] - Adjusted earnings are anticipated to be between $3.38 and $3.58 per share, indicating a year-over-year increase of 13-19% [10] - Free cash flow is projected to exceed $450 million [10] - For Q1 2025, net sales are expected to increase in the low-single digits, with mid-single-digit growth projected when excluding the Under Armour impacts [11]

Financial Data and Key Metrics Changes - Gildan Activewear reported record fourth-quarter sales of $822 million, a 5% increase year-over-year, with adjusted EPS of $0.83, up 11% year-over-year [8][23] - For the full year, revenues reached approximately $3.3 billion, with adjusted operating margins of 21.3% and adjusted diluted EPS growth of 17% [9][23] - The company returned a record $889 million to shareholders in 2024, including dividends and share repurchases [24][25] Business Line Data and Key Metrics Changes - Activewear sales increased by $70 million or 11% year-over-year, driven by higher sales volumes [17][19] - Hosiery and underwear sales were down 23% due to the phase-out of Under Armour, but would have increased by high single digits without this impact [19][20] - The Comfort Colors brand saw a 40% increase in sales for the full year 2024 [11][64] Market Data and Key Metrics Changes - International sales increased by 20% year-over-year for the last two quarters, with strong performance in Europe [12][18] - The company experienced positive point-of-sale (POS) growth across channels and product lines, capturing market share in key growth categories [18][92] Company Strategy and Development Direction - Gildan Activewear is focused on its sustainable growth strategy (GSG), which includes capacity expansion, innovation, and ESG initiatives [9][26] - The company plans to achieve mid-single-digit net sales growth and mid-teen adjusted diluted EPS growth from 2025 to 2027 [9][29] - The company is expanding its product line and distribution through the Champion brand, which is expected to enhance market share [11][72] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2025, despite mixed macroeconomic conditions and geopolitical uncertainties [34] - The company anticipates revenue growth in the mid-single digits for 2025, with adjusted diluted EPS expected to be in the range of $3.38 to $3.58, representing a year-over-year increase of 13% to 19% [29][30] - The effective tax rate for 2025 is expected to remain similar to 2024 levels, reflecting the impact of global minimum tax [31] Other Important Information - The company announced executive leadership nominations and a CFO transition as part of a multiyear succession planning process [4][36] - The new manufacturing complex in Bangladesh is ramping up as planned, supporting growth expectations and cost structure improvements [26][126] Q&A Session Summary Question: Expectations for Activewear and hosiery and underwear in Q1 - Management expects Activewear to grow low single digits, with mid-single digits growth excluding Under Armour impact, while hosiery and underwear will be affected by the Under Armour phase-out [46][49] Question: Gross margin unpacking and pricing pressure - Gross margin for Q4 was 30.8%, up 60 basis points, with stable pricing expected to continue into 2025 [52][96] Question: Impact of new product innovation on sales - New product innovations, particularly soft cotton technology, are expected to drive significant sales growth, with three-quarters of revenue growth in 2025 coming from new programs [67][68] Question: Capital investment in yarn facilities and national account opportunities - Over $100 million has been invested in modernizing yarn facilities, with significant opportunities in national accounts, particularly with large mass market retailers [100][104] Question: Capacity utilization assumptions for 2025 - The company has ample capacity to support its guidance for 2025, with expectations to reach close to 100% ramp-up in Bangladesh by the end of Q2 2025 [112][128] Question: Competitive landscape and distributor consolidation - The company views distributor consolidation as a positive development, allowing for stronger partnerships and continued sales growth [134]

(all amounts are in U.S. dollars except where otherwise indicated) (1) Please refer to "Definition and reconciliation of non-GAAP financial measures" in this press release Gildan Reports Record Fourth Quarter Revenue and Adjusted Diluted EPS and Initiates Guidance for 2025 1 Montreal, Wednesday, February 19, 2025 - Gildan Activewear Inc. (GIL: TSX and NYSE) today announced results for the fourth quarter and full year ended December 29, 2024, and initiated annual guidance for 2025. In addition, the Company a ...