Gildan’s president and CEO Glenn J. Chamandy is proud of his team’s “record performance” in FY2022 with revenue up 11% over 2021 and what he describes as “strong margin delivery in every fiscal quarter”. He said: “And despite near term
headwinds related to the economic environment, which impacted our performance in the fourth quarter and which may persist through the first part of 2023, we remain excited about the Gildan Sustainable Growth strategy, as well as our strong competitive positioning and ability to support our customers, as we work towards delivering on our long-term growth aspirations”.
Gildan Q4 results
Gildan’s sales for the fourth quarter ending 1 January 2023 of $720m were down 8% over the prior year, consisting of activewear sales of $595m, down 5%, and sales of $125m in the hosiery and underwear category, down 21% compared to the prior-year quarter.
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Gildan stated the decline in activewear sales was due to lower volumes resulting from a combination of lower POS in retail end-markets, and to a lesser extent, at North American distributors, as well as the absence of inventory replenishment versus a year ago, partly offset by higher net selling prices and the favourable impact of the mix.
International sales in the quarter were up 16% over the prior year, benefiting from inventory replenishment and higher net selling prices. In the hosiery and underwear category, the sales decline compared to last year was due to weak POS in retail and the impact of retailers continuing to reduce inventory levels with these impacts slightly offset by higher net selling prices.
Net earnings for the period were $84m, compared to net earnings of $174m in the fourth quarter last year. A gross margin of 32.6% in the quarter was up 340 basis points over 2021.
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Gildan full year 2022 results
Net sales for the year ended 1 January 2023, were $3.2m in 2022, up 11% over the same period last year, reflecting a 17% increase in activewear, partly offset by a decline of 14% in the hosiery and underwear category.
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By GlobalDataThe year-over-year increase in activewear sales where we generated sales of $2.8m was primarily driven by higher net selling prices and a favourable product mix. The decline in the hosiery and underwear category, which generated
sales of $478m, primarily reflected the impact of lower unit sales volumes due to weaker demand in retail and the continued impact of tight inventory management at the retailer level.
Net earnings were down 10.8% to $541.5m compared to $607.2m in the year prior. Gross margins of 30.6% compared to 32.2%, in the prior year. On an adjusted basis, the gross margin for 2022 was 29.8% of sales, compared to 30.9% of sales in the same period last year.
Gildan’s outlook
For 2023, Gildan expects revenue growth for the full year to be in the low single-digit range and full-year adjusted operating margin to fall within its 18% to 20% annual target range, despite expected margin pressure in the first quarter driving it 200 to 300 basis points below the low end of our target range.
Gildan said that in the first part of 2023, it expects continued headwinds tied to the demand environment and too strong comparative periods, particularly as it cycles post-pandemic inventory replenishment in the first quarter.
Gildan added: “We also expect increased margin pressure in early 2023 as we work through higher raw material and input costs currently in our inventories. However, as we move past the first quarter, we expect these headwinds to abate, enabling us to resume our growth trajectory and our path towards delivering on our performance targets.”
