CANADA: Higher margins boost Gildan Q4 earnings
Basic apparel manufacturer Gildan Activewear saw earnings rise nearly 25% in the company's fourth quarter, thanks to higher gross margins.
Net earnings for the three months to 30 September increased 24.5% to US$45.8m before restructuring charges, which reduced the figure to $40.9m.
The company said higher gross margins for activewear had caused the earnings growth, partially offset by lower activewear selling prices, higher raw material costs and higher selling, general and administrative and depreciation expenses.
Fourth quarter sales were up 8.4% to $254.9m, thanks to an 8.9% increase in sales volumes for activewear and a 15.7% increase in sales volumes of socks.
That lifted Gildan's full-year net earnings to $130m - or $157.3m before restructuring costs - compared to $106.8m in 2006. FY sales were up 24.7% to $964.4m.
The company reconfirmed its previous 2008 EPS guidance of $1.85, up 43.4% on fiscal 2007, but added a note of caution: "Although a selling price increase in the screenprint channel is currently being successfully implemented, the company believes that it is premature to increase its fiscal 2008 EPS guidance, partially due to inflationary pressures on energy, dye and chemicals costs and also due to the overall uncertainty at this stage of the economic and market outlook for 2008."
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