• Q1 net profit up 18% to US$41.7m
  • Net sales rise 7.3% to $451.4m
  • Gross margins down slightly on lower printwear prices

Apparel company Gildan Activewear recorded an 18% rise in first quarter earnings, buoyed by revenue increases in both its major operating segments.

Printwear revenues were up 7.4% to $261.8m in the three months to 29 December, while branded apparel sales rose 7.1% to $189.6m.

Meanwhile, gross margins fell slightly – down to 26.4% from 26.8% a year ago – thanks to lower printwear prices, partially offset by a more favourable printwear product mix and slightly lower cotton costs.

Gildan said it planned capital expenditure of $300-350m in fiscal 2014, most of it on yarn-spinning, the upgrading of production facilities and the construction and acquisition of new manufacturing capacity.

For the second quarter, the Canadian company expects to record adjusted earnings per share of $0.61-64, up 3.4-8.5% on last year, on revenues of over $550m, up 5%-plus.

It reiterated its full-year forecast of net sales of $2.35bn and adjusted EPS of $3.00-3.10.

Analyst BMO Capital Markets said the results announcement contained “several bright spots”, including retail programme wins, new licensing deals and progress on capital projects.