Gildan Activewear reports Q2 sales record, earnings dip
today Aug 2, 2019
Gildan Activewear saw second quarter results return to a growth trajectory on Thursday, but still reported a net income dip of 8.5 percent.
For the three months ended June 30, the Montreal-based apparel manufacturer reported sales of $802 million, up approximately 5 percent from the same period last year, setting yet another second quarter record.
Sales were driven primarily by the company’s activewear segment, where sales climbed 6.5 percent compared to the second quarter of 2018, reaching $665.6 million. The segment climbed due to a higher unit sales volumes of fashion basics and fleece, as well as due to volume growth in global lifestyle brand products, and higher e-commerce sales volumes.
Still, the company reported a slight sales decline in the hosiery and underwear category of 2.2 percent, though underwear sales grew more than 50 percent over the prior year quarter, reflecting the successful launch of its new private label men’s underwear program.
International sales were up slightly, though the company says it saw softness in Europe and slower growth in China.
Likewise, Gildan said net income was $99.7 million or $0.49 per share on a diluted basis, which was down compared to net earnings of $109 million, or $0.51 per share on a diluted basis, reported for the same period last year.
Excluding the impact of after-tax restructuring and acquisition-related costs in both years, Gildan reported adjusted net earnings of $115 million, or $0.56 per share on a diluted basis, up from $111.5 million, or $0.52 per share on a diluted basis, in the second quarter of 2018.
Looking forward, the company reconfirmed its 2019 full year sales guidance projecting sales growth in the mid-single-digit range and updated its full year EPS and adjusted diluted EPS guidance.
It now expects 2019 GAAP diluted EPS of $1.80 to $1.85 and adjusted diluted EPS of $1.95 to $2.00, compared to its previous guidance range projecting GAAP EPS of $1.75 to $1.85 and adjusted diluted EPS of $1.90 to $2.00.
Meanwhile, for the third quarter of 2019, the company is projecting sales growth to be in the mid-single-digit range, lower than previously anticipated due to revised timing of fleece sales.
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