Gildan Activewear (US:GIL) ZACKS·2025-04-30 18:45Core Insights - Gildan Activewear Inc. reported first-quarter 2025 results with both revenue and earnings exceeding Zacks Consensus Estimates, driven by the execution of its GSG strategy despite macroeconomic challenges [1][2]. Financial Performance - Adjusted earnings were 59 cents per share, surpassing the Zacks Consensus Estimate of 57 cents, remaining flat year over year [2]. - Net sales reached $711.7 million, a 2.3% year-over-year increase, slightly above the Zacks Consensus Estimate of $711 million [2]. - Activewear segment sales totaled $647.4 million, reflecting a 9.3% year-over-year increase, attributed to higher sales volumes and a favorable product mix in North America [3]. - Hosiery and Underwear category net sales declined 38% year over year to $64.3 million, primarily due to the Under Armour phase-out and unfavorable product mix [3]. Regional Performance - U.S. sales increased 2.4% to $632.6 million from $618 million in the prior year [4]. - Canadian sales grew 10.3% to $27.9 million from $25.3 million [4]. - International sales declined 2.5% to $51.2 million from $52.5 million [4]. Margins and Costs - Adjusted gross profit was $221.9 million, up 5.1% year over year, with an adjusted gross margin increase of 90 basis points to 31.2% due to lower raw material costs [5]. - Adjusted SG&A expenses rose 1% year over year to $86.5 million, with a decline in percentage of net sales by 20 basis points [5]. - Adjusted operating income improved 7.9% to $135.5 million, with an adjusted operating margin increase of 100 basis points to 19% [5]. EBITDA and Cash Flow - Adjusted EBITDA totaled $165.8 million, representing a year-over-year increase of 5.5%, with an adjusted EBITDA margin expansion of 70 basis points to 23.3% [6]. - The company ended the quarter with cash and cash equivalents of $75.5 million, long-term debt of $1.8 billion, and stockholders' equity of $1.41 billion [7]. 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 [8]. - Adjusted earnings are anticipated to be between $3.38 and $3.58 per share, indicating a year-over-year increase of 13-19% [8]. - Free cash flow is expected to exceed $450 million [8].