Gildan Activewear has reported what it says are “record” second-quarter sales, although restructuring and acquisition-related costs meant a fall in net earnings.
For the second quarter ending 30 June, the Canadian activewear company said earnings fell 8.5% from CAD109m to CAD99.7m a year earlier. Operating income declined 5.7% to CAD114.1m.
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The company incurred $16.3m of restructuring and acquisition-related costs in the quarter, compared to $3m in the same period last year, which related primarily to manufacturing optimisation initiatives, including consolidation of textile, hosiery, sewing and yarn operations, as well as warehouse consolidation and sales and marketing initiatives.
Sales, however, were 4.9% higher year-on-year at $801.6m, lifted by growth momentum in fashion basics, fleece, and global lifestyle brand sales. Underwear sales grew more than 50% year-on-year, reflecting the successful launch of its new private label men’s underwear programme with its largest mass retail customer.
Gildan said the first half of 2019 is “tracking well within the company’s expectations,” and is now projecting full-year EPS of $1.80 to $1.85 compared to its previous guidance range of $1.75 to $1.85.
In May, Gildan announced plans to develop a new manufacturing complex in Bangladesh which, once fully operational, is expected to provide the capacity to service over US$500m in sales.
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