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.

Net earnings climbed to US$239.9m for the year ended 2 October, and sales rose 31.6% to $1.7bn thanks to higher selling prices and a 7.7% rise in unit sales volumes for active wear and underwear. Revenues were also boosted by the acquisition of sock maker Gold Toe Moretz, but partially offset by lower organic stock sales.

Gildan said higher active wear and underwear sales reflected a recovery in the US wholesale distributor channel in the first half of the fiscal year, its penetration in other screenprint markets, and a rise in shipments to mass-market retailers.

But these gians were partially offset by an 8% drop in overall market demand in shipments from US distributors to US screen printers in the second half.

The company expects to post a loss of around $0.40 per share in its first-quarter on sales of $300m. Short term promotional discounting is on the increase, it said, and distributors are not replenishing inventory levels in the hope of a reduction in selling price. 

Gildan yesterday said it would reduce gross selling prices in the US wholesale channel from 5 December and apply this to existing distributor inventories.

The company also projects a 40% decline in unit sales volumes in the screen print market in the first quarter.

But it expects to benefit from lower cotton prices in the second half of the year, with the full-year EPS forecast of US$1.3%, down from $2.01 in fiscal 2011. It expects revenues to rise to $1.9bn from $1.7bn in 2011.