• Q4 net income increases 9.9% to US$74.3m from $67.6m
  • Net sales up 8.1% to $587.9m from $546.8m
  • FY net earnings up 0.1% to $346.6m from $346.1m

Apparel maker Gildan Activewear has booked a rise in both earnings and revenue in its fourth-quarter, thanks to growing sales in its printwear and branded apparel businesses.

For the three months to 1 January, the Montreal-based company said net income increased by 9.9% to US$74.3m from $67.6m a year earlier. Excluding restructuring and acquisition-related costs, adjusted net earnings were $74.5m. For the full year, net earnings for 2016 were up 0.1% to $346.6m from $346.1m.

Net sales also grew, up 8.1% to $587.9m from $546.8m in the year ago period, reflecting a 14.4% increase in printwear sales and a 1.2% rise in branded apparel sales. Growth was primarily driven by the impact of the Alstyle and Peds acquisitions, which contributed around $50m in sales in the fourth quarter of 2016. For the full year, net sales grew 0.6% to $2.59bn from $2.57bn last year, due to a 1% increase in printwear segment sales, while branded apparel sales remained flat.

The printwear business continued to perform well in line with the company's expectations, it said. Segment sales for the quarter grew strongly to $325.8m, up 14.4% from $284.9m in the year-ago period. The increase was mainly due to the $30m sales contribution from the Alstyle acquisition and organic unit sales volume growth. However, this was partly offset by lower net selling prices and the impact of unfavourable foreign currency exchange on international sales.

Net sales for the branded apparel segment reached $262.1m, up 1.2% from $258.9m. Despite a challenging retail environment, the $20m impact from the Peds acquisition, combined with positive point of sales growth during the quarter, more than offset the impact of significant retailer inventory de-stocking and the anticipated impact of the exit of certain private label programmes as the company had previously planned.

Meanwhile, consolidated gross margin in the quarter was 26.7%, in line with the same period last year, as the benefits from lower raw material and other input costs were largely offset by lower net selling prices.

For 2017, Gildan expects to achieve adjusted diluted EPS in the range of $1.60 to $1.70, which at the mid-point of the guidance range represents growth of 9% over 2016 on projected high single digit consolidated net sales growth. Net sales in 2017 in the printwear and branded apparel segments are each expected to increase in the high single digit range.

Last month, Gildan acquired the American Apparel brand in a court-supervised auction for around $88m.

Gildan acquires American Apparel with US$88m bid