CANADA: Gildan lowers forecasts despite Q3 profit rise
- Q3 net profit up 41.7% to US$94.1m
- Net sales up 34% to $529.8m
- Plans to run at full capacity to rebuild inventories
Apparel company Gildan Activewear lowered its full-year revenue and earnings forecasts despite an apparently buoyant third quarter which saw large increases in profit and sales.
The Canada-based maker of T-shirts and socks undershot its revenue forecast by about US$20m, despite a 20.9% rise in activewear and underwear sales, plus a 139.1% surge in sales of socks.
Gildan said average net selling prices had increased by 26%, but volumes had fallen by 3.9%, thanks to a combination of capacity constraints, low inventory availability and lower industry demand, which had continued to deteriorate during the quarter.
However, gross margins were up to 28.3% from 27.1% thanks to manufacturing efficiencies and the impact of the company’s acquisition of Gold Toe Moretz.
Gildan lowered its full-year forecasts to revenues of about $1.7bn and earnings per diluted share, after adjustments, of $2.00.
It added: “The company plans to continue to run all of its manufacturing facilities at full production capacity during the fourth quarter, in spite of the uncertain economic environment, in order to rebuild inventories to optimal levels and to position the company to take advantage of any improvement in market conditions and pursue its growth initiatives in fiscal 2012.”
Canada-based T-shirt and sock maker Gildan Activewear today (1 December) booked a 21% rise in full-year profit, helped by higher sales and selling prices....
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