For the third quarter ended 1 October 2023, Gildan Activewear saw net sales increase 2% from $850m to $870m as the company says it moved past the impact of strong prior year comparative periods, tied to post-pandemic replenishment which saw Gildan report record Q3 results, in 2021.
However, Gildan notes that for activewear, while Point Of Sale was positive on a year-over-year basis, sales for this category were essentially flat during Q3.
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The brand explains it benefitted from the favourable impact of fleece shipments, which were driven by strong sell-through and seasonal replenishment. Although, as anticipated, trade-down within the activewear category persisted this quarter.
The benefit of fleece shipments was said to be offset by lower volume in some other activewear categories and slightly lower net selling prices.
Additionally, international markets remained particularly challenging during the quarter compared Q3 in the prior year, as a result of lower demand and price pressures across all markets.
Operating income fell 11.2% to $155m for Q3 2023, down from $174.6m in Q3 2022, while net earnings decreased 16.7% to $127.4m, down from $153m in the same quarter last year.
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By GlobalDataGlenn J. Chamandy, Gildan’s president and CEO, believes that the brand’s competitive position remains very strong in a challenging environment driven by its industry-leading vertically integrated manufacturing platform.
Chamandy continues: “We delivered third quarter performance which came in overall in line with our expectations. We resumed our sales growth trajectory and delivered operating margin within our target range.”
Gildan further adds that, under its Gildan Sustainable Growth business strategy, it remains committed to driving market share gains in key categories through the roll-out of new retail programs and its vertically-integrated manufacturing platform, including its new manufacturing complex in Bangladesh.
In July 2023, Gildan announced that it was gradually ramping down production of a sewing factory in Honduras as part of wider plans to “balance its apparel sewing production”.
Sharing the outlook for the quarters ahead, Gildan Activewear forecasts revenue growth in Q4 against an easier comparative in the prior year. The company expects full year revenues and earnings per share to be at the lower end of the previously provided range, which it says reflects softer demand trends in certain markets stemming from the macro environment.
