Gildan revenue growth eroded by Hurricane Florence
Montreal, Canada-based basics manufacturer and owner of American Apparel, Gildan Activewear Inc., announced a 5.3% increase in third-quarter net sales on Thursday, driven by strong growth in international activewear but dampened by disruption caused by Hurricane Florence.
The company’s net sales totaled $754.4 million in the third quarter ended September 30, 2018. This reflected a 12.1% increase in activewear sales, which came to $612.4 million, partly offset by a 16.6% decline in hosiery and underwear that was largely related to lower unit sales of socks. Activewear saw particularly strong growth in international sales, which increased 27.6%.
Overall revenues were also negatively affected by Hurricane Florence, which led to shipping limitations in September that impacted sales by around $30 million.
Operating income for the quarter totaled $127.6 million, a $2.7 million increase compared to the prior-year period, while net earnings fell to $114.3 million, compared to $116.1 million. However, the company’s adjusted net earnings, which exclude the impact of after-tax restructuring and acquisition-related costs, were $118.1 million, essentially flat when compared to the same period in the previous year.
Year-to-date sales increased 3.3% to $2.17 billion, pushed by an 11% increase in activewear but pulled down by a 20.4% decrease in hosiery and underwear, while net earnings for the period totaled $291.2 million.
The company continues to expect to see sales growth in the mid-single-digit range in its full-year 2018 results, driven by double-digit growth in activewear.
However, due to disruption caused by Hurricane Florence and lower-than-anticipated licensed brand sock sales, revenues in the hosiery and underwear category are now expected to decline by approximately $125 million, rather than the previously reported $85 million.
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