Gildan Reports Record Third Quarter Revenue and Adjusted Diluted EPS¹ and Updates its Full Year 2024 Guidance

Core Insights - Gildan Activewear reported record third quarter net sales of $891 million, reflecting a 2.4% increase year-over-year, with a notable 6% growth in Activewear sales [1][3][28] - The company generated a gross profit of $278 million, representing a gross margin of 31.2%, an improvement of 370 basis points compared to the previous year [4][26] - Adjusted diluted EPS for the quarter was $0.85, up 15% from $0.74 in the prior year, while GAAP diluted EPS increased by 12% to $0.82 [7][26] - Gildan returned a record $404 million to shareholders through dividends and share repurchases during the quarter [1][8] Financial Performance - Operating income for Q3 2024 was $193 million, or 21.7% of net sales, compared to $155 million, or 17.8% of net sales in the same period last year [6][26] - SG&A expenses were $84 million, with adjusted SG&A expenses down 5% to $78 million, reflecting a positive impact from a jobs credit introduced in Barbados [5][26] - Cash flow from operations totaled $178 million, leading to a free cash flow of $149 million after capital expenditures of $30 million [8][26] Market Dynamics - Activewear sales were driven by higher sales volumes and positive point-of-sale (POS) trends across North America, while international sales increased by 20% year-over-year [3][28] - The Hosiery and underwear segment saw a decline of 18% in sales, primarily due to the phase-out of the Under Armour business [3][28] - The company continues to gain market share in key growth categories, aided by new product innovations [2][3] 2024 Guidance - Gildan expects full-year revenue growth to be in the low-single digits, slightly improved from previous guidance of flat to low-single digits [15][16] - Adjusted operating margin is anticipated to be slightly above 21%, with adjusted diluted EPS projected in the range of $2.97 to $3.02, reflecting a year-over-year increase of 15.5% to 17.5% [15][16] - Free cash flow is expected to exceed 2023 levels, driven by increased profitability and lower capital expenditures [15][16] ESG Recognition - Gildan was recognized as one of Canada's Most Responsible Companies by Newsweek, ranking 14th overall and first in the Retail and Consumer Goods industry [17]