Montreal-based Gildan reported record first-quarter sales of US$775m for the three months ended 3 April, consisting of activewear sales of $667m, up 38% over the prior year, and sales in the hosiery and underwear category of $108m, up 3% over last year.
Gildan said the activewear sales increase was largely driven by volume growth and net selling price increases as well as favourable product-mix. Activewear volume growth reflected strong demand in North American markets, particularly in the distributor channel, partly offset by lower international shipments due to ongoing demand weakness in Europe and Asia, it added.
In turn, the overall increase in North American distributor activewear shipments in the quarter was due to higher sell-through driven by continued recovery of large events, travel, and other end-use markets. Volume growth with distributors also reflected Gildan’s improved production levels compared to last year which allowed it to better service seasonal inventory requirements and support growth, the company noted.
In the hosiery and underwear category, higher sales were primarily driven by higher selling prices.
Net earnings, meanwhile, surged 48.6% to $146.4m from $98.5m a year prior, while gross margin narrowed slightly to 31% from 32%.
“Record results in the first quarter and a strong start to 2022 reflect the impact of Gildan’s Sustainable Growth (GSG) strategy,” said CEO Glenn Chamandy. “Our team’s clear focus on capacity-driven growth, innovation and ESG, leveraging our world-class, vertically-integrated manufacturing platform, is putting us in a strong position to service customer demand while effectively managing inflationary cost pressures.”
During the first quarter, Gildan amended the terms of its existing $1bn revolving credit facility to incorporate sustainability-linked terms that reduce or increase the related borrowing costs based on the company’s annual performance against three of its recently announced ESG targets in the areas of climate change, circularity, and diversity, equity, and inclusion. Gildan claims to be the first Canadian apparel manufacturing company to tie financing costs to the achievement of important ESG targets.
While earlier this year, Gildan CFO Rhodri Harries said the company is “rapidly moving forward” with the construction of the first “up-to-large-scale” textile and sewing facilities in Bangladesh.