CANADA: Gildan Q1 profit lifted by revenue boost
- 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.
Gildan’s strategy focuses on production downtime to better align inventory levels with projected sales and improve supply chain efficiency. The company is also seeking to further increase its presence...
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