CANADA: Gildan Q3 profit up despite restructuring charges
Basic apparel manufacturer Gildan Activewear has reported third quarter net earnings of US$52.4m, an increase from $42.8m last year.
Total restructuring charges for the company's manufacturing facilities in the third quarter amounted to US$4.6m.
Sales in the third quarter amounted to $291.6m, up 24.7% from $233.9m in the third quarter of last year. The increase in sales revenues was attributed to $30.5m of sock sales pursuant to the acquisition of Kentucky Derby Hosiery and an 11.6% increase in unit sales volumes for activewear. Sales for the nine months ended July 1 were $709.6, up 31.9% compared to the same period last year.
For the first nine months of fiscal 2007, net earnings amounted to $89.2m, compared to net earnings of $90.0m last year, due to the impact of restructuring and other charges.
The company expects that the impact of the Kentucky Derby Hosiery acquisition will continue to be slightly dilutive to EPS in the fourth quarter of fiscal 2007 and so now expects adjusted diluted EPS before restructuring charges for the fourth quarter to be approximately $0.38, up 27% from the corresponding quarter last year.
In March the company had announced plans to close two remaining textile facilities in Montreal and its cutting facility in Bombay, NY, in the fourth quarter of this fiscal year with approximately 465 employees affected. It also announced the closure of two sewing facilities in Mexico immediately, where 1,365 employees would be affected.
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