Basic apparel maker Gildan Activewear has made a strong start to the year as it returned to profit in the first quarter and booked sales increases boosted by activewear.
The company, which makes activewear, underwear, socks, hosiery, and legwear products for customers including wholesale distributors, screenprinters, embellishers and retailers, saw earnings reach US$98.5m in the three months ended 4 April. This compared to a net loss of $99.3m a year earlier.
Gross margin was up 620 basis points to 32%, and 530 basis points on an adjusted basis. This was enhanced by the positive impact of an approximate $18m accrual of a one-time payment from the USDA related to its Pandemic Assistance for Cotton Users (PACU) programme.
Net sales for the first quarter amounted to $589.6m, up 28.4% on the first quarter of 2020. This was boosted by a 30.1% increase in activewear sales to $484.6m, and a 21.4% increase in hosiery and underwear sales to $105m.
The increase in activewear sales was driven by double digit unit sales volume growth in North American and international imprintables markets and activewear sold in retail channels, as well as favourable product-mix, partly offset by lower net selling prices
“Our first quarter results reflected a strong start to 2021 as continued benefits from our Back to Basics strategy supported sell-through across all channels and drove strong operating margin performance, allowing us to deliver net earnings significantly above prior year and first quarter 2019 levels,” said Gildan president and CEO, Glenn Chamandy.
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“While large events have not yet restarted, we continue to be encouraged by the strength of our imprintables business and on the retail side we were pleased with strong double-digit growth in underwear and activewear sales compared to the first quarters of 2020 and 2019.”