Gildan Reports Record Third Quarter Revenue and Adjusted Diluted EPS¹ and Updates its Full Year 2025 Guidance

Core Insights - Gildan Activewear Inc. reported a strong third quarter for 2025, with net sales reaching $911 million, a 2.2% increase year-over-year, driven by a 5.4% growth in Activewear sales [3][7]. - The company achieved record adjusted diluted EPS of $1.00, reflecting a 17.6% increase from the previous year [9][21]. - Gildan's merger agreement with HanesBrands is expected to close by early 2026, which is anticipated to enhance its market position [16][17]. Financial Performance - Net sales for Q3 2025 were $911 million, with Activewear sales at $831 million, up 5.4% due to favorable product mix and higher prices [3][32]. - Gross profit for the quarter was $307 million, representing 33.7% of net sales, an improvement from 31.2% in the prior year [4][30]. - Operating income was $192 million, or 21.1% of net sales, slightly down from 21.7% in the previous year, but adjusted operating income increased to $212 million, or 23.2% of net sales [6][31]. Expense Management - SG&A expenses rose to $95 million, up from $84 million in the prior year, primarily due to higher variable compensation and IT-related expenses [5][12]. - Net financial expenses increased to $44 million, attributed to fees related to financing for the HanesBrands acquisition [8][14]. Year-to-Date Results - Year-to-date net sales reached $2,541 million, a 3.7% increase compared to the same period last year, with Activewear sales up 8.7% [10][11]. - Gross margin improved to 32.2%, up 150 basis points year-over-year, driven by lower raw material costs and favorable pricing [11][30]. - Adjusted diluted EPS for the year-to-date was $2.55, a 17% increase from the previous year [14][46]. Merger and Acquisition - The merger with HanesBrands is valued at approximately $2.2 billion in equity and $4.4 billion in enterprise value, with Gildan shareholders set to receive shares and cash for their HanesBrands stock [16][17]. - The transaction is expected to enhance Gildan's capabilities and market reach, aligning with its growth strategy [2][18]. 2025 Guidance Update - The company updated its full-year guidance, projecting revenue growth in the mid-single digits and adjusted diluted EPS in the range of $3.45 to $3.51, reflecting a 15% to 17% year-over-year increase [21][19]. - Free cash flow is expected to be approximately $400 million, down from previous guidance of above $450 million [21][19]. Dividend Declaration - The Board of Directors declared a cash dividend of $0.226 per share, payable on December 15, 2025, to shareholders of record as of November 19, 2025 [22]. ESG Recognition - Gildan was recognized as one of Canada's Best 50 Corporate Citizens for the fourth consecutive year and featured on TIME's World's Most Sustainable Companies list [20].