Gildan Activewear (NYSE:GIL) Q4 2025 Earnings call February 26, 2026 08:30 AM ET Company ParticipantsBrandon Cheatham - Vice President of Equity ResearchChester Ward - President, Sales, Marketing and DistributionChris Li - Managing Director of Equity ResearchGlenn Chamandy - President and CEOIan Liu - Equity Research AssociateJessy Hayem - Senior Vice President, Head of Investor Relations and Global CommunicationsLuca Barile - EVP and CFOStephen MacLeod - Managing Director of Equity ResearchConference Call ...

Ovintiv (NYSE:OVV) Q4 2025 Earnings call February 24, 2026 10:00 AM ET Company ParticipantsBrendan McCracken - President and CEOCorey Code - CFOGreg Givens - EVP and COOGreg Pardy - Managing Director and Head of Global Energy ResearchJason Verhaest - Director of Investor RelationsJosh Silverstein - Managing DirectorKevin MacCurdy - Managing DirectorLloyd Byrne - Managing Director, Equity ResearchNeil Mehta - Head of Americas Natural Resources Equity ResearchPhillip Jungwirth - Managing DirectorNone - Compan ...

Core Insights - Lakeland Industries, Inc. has successfully fulfilled an urgent order for operational footwear from the Italian Ministry of the Interior for police personnel during the Milano Cortina 2026 Winter Olympics, showcasing the company's capability in rapid delivery and inventory management [1][4]. Group 1: Company Overview - Lakeland Industries, Inc. is a leading global manufacturer of protective clothing and apparel for various sectors, including industry, healthcare, and first responders [1][6]. - The company offers a comprehensive line of fire services and industrial protective clothing, along with decontamination, repair, and rental services [6]. Group 2: Recent Developments - The Italian Ministry of the Interior placed an order for boots designed for wildland firefighting, which are also suitable for crowd control and emergency response, highlighting the versatility of Lakeland's products [3][4]. - The company was able to deliver the required footwear to multiple Olympic locations in under 48 hours, demonstrating its efficient logistics and inventory management capabilities [4][5]. Group 3: Competitive Advantage - Lakeland's competitive strength lies in having its entire product collection available in stock, which allowed for an immediate response to the urgent order [4]. - The successful execution of this order led to an additional order from the Ministry, underscoring the reliability of Lakeland's service [4][5].

Core Insights - The Petroleum Additives segment experienced a 6% decline in Q4 shipments due to broader market softness and a strategic exit from low-margin businesses to protect profitability [1] - Operating profit in the core additives segment was negatively impacted by higher unit costs as the company reduced production volumes to optimize inventory levels [1] - The Specialty Materials segment showed significant growth, driven by increased demand at AMPAC and the acquisition of Calca Solutions on October 1, 2025 [1] - Despite a decline in 2025 results compared to a record-breaking 2024, the business remains resilient amid ongoing inflation and tariff impacts [1] - The company has allocated approximately $1,000,000,000 to the Specialty Materials segment to develop a high-technology growth engine alongside its legacy additives business [1] - A higher effective tax rate in 2025 was a primary factor contributing to the year-over-year decline in net income and earnings per share [1]

Core Insights - The company is focused on maintaining quality and compliance while exploring alternative supply sources, primarily due to the concentration of production in China and the impact of tariffs on costs [1][3][21] - The relaunch of the Groovy Girls product line is expected to enhance the company's market presence and direct-to-consumer sales starting in May 2026 [2] - Despite a decline in net sales to $20.7 million from $23.4 million year-over-year, net income increased to $1.5 million, indicating resilience in the business model [4][7] Financial Performance - Third quarter gross margin decreased to 23.5% from 26.1% due to elevated U.S. tariff rates and one-time costs [3][6] - Marketing and administrative expenses rose to $5 million, influenced by $600,000 in severance expenses related to operational consolidation [5][6] - The company reported a net cash flow from operating activities of $7.1 million for the nine-month period, slightly up from $7 million in the previous year [9] Inventory and Supply Chain - The company maintains a conservative inventory strategy to minimize excess inventory exposure amid volatile pricing and tariffs, with inventories at $31.2 million at quarter-end [1][8] - The majority of products are sourced from China, with over 90% of production concentrated there, although the company is exploring alternative sourcing options [12][21] Strategic Initiatives - Cost initiatives are being executed to streamline operations and reduce payroll and administrative expenses, aiming for a leaner structure to better absorb external factors [5][9] - The company is committed to disciplined capital allocation, including regular dividends, to enhance long-term shareholder value [5][9] Market Environment - The macroeconomic environment remains challenging, with uneven consumer spending and price sensitivity affecting sales, particularly in the bedding category [3][4][11] - The company is optimistic about the long-term fundamentals of the infant, toddler, and juvenile category, despite current market pressures [10]

Financial Data and Key Metrics Changes - Revenue for the December quarter increased year-over-year to $505 million, supported by nearly 11% same-store sales growth [11][12] - Gross profit was $160 million, down from the prior year due to margin pressure, with gross margins over 400 basis points below historical levels [13][14] - Reported net loss per share was $0.36, or $0.21 on an adjusted basis, with adjusted EBITDA at $15.5 million [14][15] - The company maintained a strong balance sheet with nearly $165 million in cash and improved current ratio [15] Business Line Data and Key Metrics Changes - Same-store sales performance was driven by premium brand offerings and a shift towards larger products, despite unit volume declining by low- to mid-single digits [7][12] - Higher-margin businesses, such as marinas, finance and insurance, and superyacht services, contributed positively to consolidated gross profit [13][31] Market Data and Key Metrics Changes - Market conditions remained challenging with elevated promotional activity and cautious retail behavior affecting demand patterns [6][9] - The company successfully reduced inventory levels by nearly $170 million compared to last year, indicating progress towards normalized inventory levels [8][15] Company Strategy and Development Direction - The company aims to expand into higher-margin, more stable businesses through acquisitions and operational improvements [8][9] - Focus remains on maintaining appropriate inventory levels, delivering high-quality customer experiences, and managing the business with a long-term perspective [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding early demand signals from boat shows, indicating potential for growth in the spring selling season [10][19] - The outlook for fiscal 2026 remains balanced due to ongoing uncertainty in the broader consumer and macroeconomic environment [10][17] Other Important Information - The company reaffirmed its fiscal 2026 guidance, expecting adjusted EBITDA in the range of $110 million to $125 million and adjusted net income between $0.40 and $0.95 per diluted share [16][17] - Customer deposits remained flat year-over-year, which is seen as a positive sign amid the current environment [15][50] Q&A Session Summary Question: What are the assumptions regarding the discounting environment as the selling season progresses? - Management expects the promotional environment to remain active during the winter, with potential improvement in margins as inventory levels normalize in the second half of the fiscal year [21][22] Question: Can you quantify the drivers of the decline in gross margin? - The decline in gross margin is primarily driven by promotional pressures rather than mix, with new boat margins being significantly lower than the previous year [67] Question: How did same-store sales perform throughout the quarter? - Same-store sales were strong throughout the quarter, aided by the Fort Lauderdale Boat Show, with expectations for positive growth in January [68] Question: What is the current state of customer deposits? - Customer deposits have stabilized year-over-year, reflecting solid business trends, particularly in larger products [50] Question: How are the boat shows influencing demand across different segments? - Demand at higher price points has been strong, while the lower end remains challenged, but overall trends indicate a cautious recovery in the premium segment [41][42]

Financial Data and Key Metrics Changes - Revenue for the December quarter increased year-over-year to $505 million, supported by nearly 11% same-store sales growth [11][12] - Gross profit was $160 million, down from the prior year due to margin pressure, with gross margins over 400 basis points below historical levels [13][14] - Reported net loss per share was $0.36, or $0.21 on an adjusted basis, with adjusted EBITDA at $15.5 million [14][15] - The balance sheet remained strong with nearly $165 million in cash and a healthy net debt to adjusted EBITDA ratio of just over 2x [15] Business Line Data and Key Metrics Changes - Same-store sales performance was supported by premium brand offerings and a shift towards larger products, despite unit volume declining by low- to mid-single digits [7][12] - Higher-margin businesses, such as marinas, finance and insurance, and super yacht services, contributed positively to consolidated gross profit [13][14] Market Data and Key Metrics Changes - Market conditions remained challenging with elevated promotional activity and cautious retail behavior affecting demand patterns [6][9] - The company successfully reduced inventory levels by nearly $170 million compared to last year, indicating progress towards normalized inventory levels [8][15] Company Strategy and Development Direction - The company aims to maintain an appropriate inventory position, deliver a high-quality customer experience, and manage the business with a long-term perspective [9][10] - Continued focus on acquiring complementary, less cyclical, higher-margin operations to build a more durable business model [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding early season demand signals from boat shows, indicating potential for growth in the premium segment [10][19] - The outlook for Fiscal 2026 remains balanced due to ongoing uncertainty in the broader consumer and macroeconomic environment, with expectations for adjusted EBITDA in the range of $110 million-$125 million [16][17] Other Important Information - Customer deposits remained flat year-over-year, which is seen as a positive sign given the current environment [15][50] - The company continues to prioritize maintaining inventory levels and enhancing operational efficiency to support long-term value creation [11][19] Q&A Session Summary Question: What are the assumptions regarding the discounting environment as the selling season progresses? - Management expects the promotional environment to remain active during the winter, with potential improvement in margins as inventory levels normalize in the second half of the fiscal year [21][22] Question: Can you quantify the drivers of the decline in gross margin? - The decline in gross margin is primarily driven by promotional pressures rather than mix, with new boat margins being significantly lower than the previous year [66] Question: How is demand across various income groups and price points? - Demand at the premium end has been strong, while the lower end remains challenged, with overall consumer sentiment affected by broader economic uncertainty [38][42]

Financial Data and Key Metrics Changes - Revenue for the December quarter increased year-over-year to $505 million, supported by nearly 11% same-store sales growth [10][11] - Gross profit was $160 million, down from the prior year due to margin pressure, with gross margins over 400 basis points below historical levels [11][12] - Reported net loss per share was $0.36, or $0.21 on an adjusted basis, with adjusted EBITDA at $15.5 million [13][15] - The company maintained a strong balance sheet with nearly $165 million in cash and improved current ratio and total liabilities to tangible net worth ratio [14] Business Line Data and Key Metrics Changes - Same-store sales performance was supported by premium brand offerings and a shift to larger products, despite unit volume declining by low- to mid-single digits [6][10] - Higher-margin businesses, such as marinas, finance and insurance, and super yacht services, contributed positively to consolidated gross profit [11][12] Market Data and Key Metrics Changes - Market conditions remained challenging with elevated promotional activity and cautious retail behavior affecting demand patterns [5][6] - The company noted that the fiberglass segment continued to be under pressure, impacting overall sales [38] Company Strategy and Development Direction - The company aims to reduce inventory levels, achieving a reduction of nearly $170 million year-over-year, and expects inventory levels to normalize in the second half of the fiscal year [7][15] - The strategy includes acquiring complementary, less cyclical, higher-margin operations to build a more durable business model [7][8] - The company remains focused on maintaining appropriate inventory levels and delivering a high-quality customer experience [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the upcoming spring selling season, noting early positive sentiment from boat shows [9][18] - The outlook for Fiscal 2026 remains balanced due to ongoing uncertainty in the broader consumer and macroeconomic environment [9][15] - Management expects retail margin pressure to persist through the end of the fiscal second quarter, with potential for margin recovery in the second half of the year [15][17] Other Important Information - The company reaffirmed its guidance for Fiscal 2026, expecting adjusted EBITDA in the range of $110 million to $125 million and adjusted net income between $0.40 and $0.95 per diluted share [15][16] - Customer deposits remained flat year-over-year, indicating solid business trends despite market uncertainties [14][49] Q&A Session Summary Question: What are the assumptions regarding the discounting environment as the selling season progresses? - Management expects the promotional environment to remain active during the winter, with potential for margin recovery in the spring as inventory levels normalize [21][22] Question: What is the target for inventory levels by the end of Fiscal 2026? - The goal is to achieve inventory turns above two times, requiring a reduction in inventory dollars compared to the previous year [23] Question: Can you clarify the same-store sales growth and unit volume changes? - Same-store sales grew nearly 11% despite a mid-single digit decline in unit volumes, driven by a significant increase in average unit selling prices [28][29] Question: How is demand across various income groups and price points? - Demand at the premium end is performing better, while the lower end remains more challenged, with overall trends being affected by market uncertainties [38][40] Question: What is the outlook for gross margins in the second half of the fiscal year? - Management anticipates less pressure on gross margins in the back half of the year, with opportunities for consolidation margin expansion [47] Question: What is the status of customer deposits? - Customer deposits have stabilized year-over-year, reflecting solid business trends without significant one-time impacts [49] Question: What is the current state of acquisition targets and valuations? - The acquisition pipeline remains robust, but many potential targets are facing earnings challenges, complicating valuation discussions [68][70]

Industry Overview - Consumers are cautious due to economic challenges such as high inflation and a potentially weakening job market, leading to reduced spending [1] - The S&P 500 consumer discretionary sector has returned 4.8% over the past year, significantly lower than the S&P 500's overall return of 15.1% [1] Nike - Nike has historically been a dominant player in the sportswear market, with approximately 65% of its sales coming from footwear [4] - Recent sales have been declining due to increased competition, lack of innovative products, and a strategic shift to direct-to-consumer sales, which has impacted relationships with wholesale partners [5] - In the fiscal third quarter, Nike's sales growth was stagnant after adjusting for foreign-currency effects, with wholesale revenue increasing by 8% but direct revenue declining by 9% [6] TJX Companies - TJX Companies operates an off-price retail business under brands like TJ Maxx and Marshalls, capitalizing on purchasing excess inventory at attractive prices [7] - The company has benefited from economic conditions that allow it to source a wider selection of discounted goods, particularly during challenging times [8] - In the fiscal third quarter, TJX reported a 5% increase in same-store sales, achieving positive comps across all its business segments [8]

Core Insights - Forestar Group reported a solid first quarter with revenue growth of 9% year-over-year, reaching $273 million, but net income decreased to $15.4 million due to margin pressures [3][4][7] Financial Performance - Gross profit margin for the quarter was 20.1%, down from 22.0% in the same quarter last year, primarily due to a low-margin tract sale; excluding this sale, the gross margin would have been approximately 21.5% [2][7] - Pre-tax income was $20.8 million with a pre-tax margin of 7.6%, compared to $21.9 million and 8.7% in the prior-year quarter [3][7] Investment and Liquidity - The company invested $415 million in the quarter, with plans to invest about $1.4 billion for fiscal 2026, maintaining a disciplined investment pace [5][17] - Forestar ended the quarter with approximately $820 million in liquidity, including $212 million in unrestricted cash and a net debt-to-capital ratio of 24.6% [18] Lot Position and Customer Relationships - Forestar holds a total lot position of 101,000 lots, with 65% owned and 35% controlled through purchase contracts; 10,400 lots are finished and under contract to sell [6][19] - D.R. Horton is the largest customer, with 16% of homes started in the past year on Forestar-developed lots, and a goal for one in three D.R. Horton homes to be on Forestar lots [15][16] Market Conditions and Operational Outlook - Demand for new homes is pressured by affordability constraints, but mortgage rate buy-down incentives are helping to support demand [12] - The company is focusing on developing lots for entry-level and first-time buyers, which represent the largest segment of the new home market [13][20] Guidance and Future Outlook - Forestar is maintaining its fiscal 2026 guidance for revenue between $1.6 billion and $1.7 billion and lot deliveries of 14,000 to 15,000 lots, while expecting margins to remain at the lower end of the historical range of 21% to 23% [4][20]