Gildan Activewear sales down in Q1, reaffirms 2018 targets
Apparel manufacturer Gildan Activewear Inc. announced on Tuesday a drop of 2.7 percent in net sales for its first quarter ended April 1, 2018.
Despite the drop, the Montreal-based company was unfazed by the results citing that its “performance was largely in line with its expectations and the company is on track to attain its full year financial targets.”
Net sales dropped to $647.3 million, compared with $83.5 million recorded in the prior year reflecting a 3.2 percent increase in activewear sales and a 20.4 percent decline in the hosiery and underwear category.
The company said that results were also impacted by higher raw material and other costs, as well as investments in e-commerce and distribution.
That equaled 31 cents per diluted share, down five cents from a year ago.
International sales however, were a bright spot for the company, which owns brands such as American Apparel, Secret and Silks, to name a few. International sales in the first quarter were up 24 percent, reflecting strong growth momentum in all markets.
During the quarter, the Canadian maker of apparel, including t-shirts, socks and underwear also successfully launched its full assortment of Gildan branded men's underwear on Amazon. Meanwhile, most recently, the company launched American Apparel online, which Gildan bought in January 2017 after it went bankrupt.
For the first quarter of 2018, the company generated operating income of $76.3 million and adjusted operating income of $82.7 million, down 18 percent and 17.0 percent, respectively.
This is the first quarter since Gildan introduced a new organizational realignment in order to cut costs, which included the consolidation of its printwear and branded apparel segments.
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