Fadyukhin/E+ via Getty Images Gildan Activewear Inc. (NYSE:GIL) (TSX:GIL:CA) stock is awarded a Buy rating. GIL's second quarter bottom line expanded significantly by +17.5% YoY, which was equivalent to a +2.3% beat. The stock is undervalued based on an assessment of its forward P/E multiple and its intermediate term earnings outlook. I wrote about Gildan Activewear's operating profitability outlook in my prior November 19, 2023 write-up. This update evaluates GIL's financial performance for the second quar ...

Financial Data and Key Metrics Changes - The company reported Q2 sales of $862 million, an increase of $22 million or 3% year-over-year, at the higher end of guidance [7] - Adjusted earnings per share (EPS) were $0.74, a 17% increase from $0.63 in the prior year [11] - Gross margin improved to 30.4% from 25.8% in the prior year, a 460 basis point increase [9] - Operating margin was 22.7%, up 620 basis points compared to the prior year, exceeding the target range of 18% to 20% [10] Business Line Data and Key Metrics Changes - Activewear sales increased by $45 million or 6%, driven by positive point-of-sale (POS) trends and higher replenishment of fleece [8] - Hosiery and Underwear sales decreased by 16% due to the phase-out of the Under Armour business, but would have been up mid-single-digits excluding this impact [9] - International sales grew by 7% in the quarter [9] Market Data and Key Metrics Changes - The company experienced strong market share gains in fleece and ring spun products, key growth categories [8] - POS trends improved throughout the quarter, with June ending mid-single-digits [23] - International markets showed positive growth, particularly in Continental Europe [23] Company Strategy and Development Direction - The company is focused on a sustainable growth strategy with three pillars: capacity growth, innovation, and ESG [5] - The ramp-up of the new manufacturing complex in Bangladesh is on track, expected to reach 75% capacity by year-end [13] - The company aims for mid-single-digit revenue growth and mid-teen adjusted diluted EPS growth from 2025 to 2027 [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a mixed global macroeconomic backdrop but reiterated confidence in the company's execution of its GSG strategy [15] - The company expects revenue growth for 2024 to be flat to low-single-digits, with adjusted operating margins slightly above the high end of the target range [15] - Management expressed optimism about market share gains and the overall strength of the business despite challenges [44] Other Important Information - The company resumed share repurchases, returning $182 million to shareholders in Q2 [12] - A new NCIB program was approved to repurchase up to 10% of the company's public float over the next 12 months [12] - The adjusted effective income tax rate for the quarter was 27%, significantly higher than the previous year's 4.8% [11] Q&A Session Summary Question: Strongest and weakest POS trends during the quarter - Management noted improving POS trends, particularly in fleece and ring spun categories, with overall market down slightly [22][23] Question: Competitive landscape impact on pricing - Management indicated that while there was initial price pressure due to competitor inventory liquidation, the situation has stabilized [24] Question: Clarification on fleece category performance - Management clarified that while the overall market was down, Gildan gained market share in fleece, with strong sales and a large order book [26][27] Question: Current capacity utilization in Bangladesh - Management confirmed that the ramp-up in Bangladesh is on track, with expectations to reach 75% capacity by year-end [28][29] Question: Impact of civil unrest on operations - Management stated that civil unrest had minimal impact on operations, and the business is running as usual [29] Question: Sustainable level of SG&A - Management expects SG&A to be in the 9% to 9.5% range moving forward, with potential for further leverage [30] Question: Drivers of gross margin expansion - Management attributed gross margin expansion to improved raw material costs and manufacturing efficiencies [32] Question: Transition to soft cotton impact - Management indicated that the transition to soft cotton has been well received, with positive POS trends and no price changes [34]

Gildan Activewear (GIL) came out with quarterly earnings of $0.74 per share, beating the Zacks Consensus Estimate of $0.72 per share. This compares to earnings of $0.63 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 2.78%. A quarter ago, it was expected that this apparel maker would post earnings of $0.52 per share when it actually produced earnings of $0.59, delivering a surprise of 13.46%. Over the last four quarters, the ...

2024 Second Quarter Shareholder Report | --- | --- | |-----------------------------------------------------------------------|-------| | Contents | | | MD&A | | | 1.0 Preface | 2 | | 2.0 Caution regarding forward-looking statements | 2 | | 3.0 Our business | 4 | | 4.0 Strategy | 8 | | 5.0 Operating results | 9 | | 6.0 Financial condition | 19 | | 7.0 Cash flows | 21 | | 8.0 Liquidity and capital resources | 23 | | 9.0 Legal proceedings | 28 | | 10.0 Financial risk management | 28 | | 11.0 Critical accountin ...

(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 Net sales of $862 million Operating margin of 16.4%, adjusted operating margin1 of 22.7% GAAP diluted EPS of $0.35 and adjusted diluted EPS1 of $0.74 Cash flow from operations of $140 million and free cash flow1 of $104 million Capital returned to shareholders of $182 million during the quarter through dividends and share repurchases Comp ...

(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 Net sales of $862 million Operating margin of 16.4%, adjusted operating margin1 of 22.7% GAAP diluted EPS of $0.35 and adjusted diluted EPS1 of $0.74 Cash flow from operations of $140 million and free cash flow1 of $104 million Capital returned to shareholders of $182 million during the quarter through dividends and share repurchases Comp ...

Gildan Activewear's focus on expanding its activewear segment is likely to have been a pivotal factor in the upcoming earnings report. The Zacks Consensus Estimate for second-quarter revenues stands at $851.9 million, which indicates an increase of 1.4% from the prior-year reported figure. Gildan Activewear has a trailing four-quarter earnings surprise of 5.6%, on average. In the last reported quarter, this Montreal, Canada-based company surpassed the Zacks Consensus Estimate by a margin of 13.5%. Gildan Ac ...

About Gildan Gildan owns and operates vertically integrated, large-scale manufacturing facilities which are primarily located in Central America, the Caribbean, North America, and Bangladesh. Gildan operates with a strong commitment to industry-leading labour, environmental and governance practices throughout its supply chain in accordance with its comprehensive ESG program embedded in the Company's long-term business strategy. More information about the Company and its ESG practices and initiatives can be ...

MONTREAL, July 17, 2024 (GLOBE NEWSWIRE) -- Gildan Activewear Inc. (GIL; TSX and NYSE) will report its 2024 second quarter results on Thursday, August 1st, 2024. A press release will be issued before markets open, and a conference call is scheduled on that same day at 8:30 AM ET to discuss the Company's results. The conference call can be accessed by dialing (800) 715-9871 (Canada & U.S.) or (646) 307-1963 (international) and entering passcode 5492469#. A replay will be available for 7 days starting at 12:3 ...

MONTREAL, June 28, 2024 (GLOBE NEWSWIRE) -- Gildan Activewear Inc. (GIL: TSX and NYSE) ("Gildan" or the "Company") is pleased to share that it has been recognized as one of the Best 50 Corporate Citizens in Canada by Corporate Knights for the third consecutive year. Gildan is the only company in the Textiles & Clothing Manufacturing peer group to be included. In addition, Gildan has been included in the inaugural edition of TIME's World Most Sustainable Companies, and is one of only 12 Canadian companies fe ...