Gildan Activewear Q2 profits soar to US$72.3M; revenue up 8.4% to US$523M

MONTREAL – Gildan Activewear Inc. (TSX:GIL) has reported what it calls “record results” for its fiscal 2013 second quarter and is also upgrading its outlook for the year as a whole.

The Montreal-based clothing manufacturer reported Thursday that net earnings were US$72.3 million or 59 cents per share on a diluted basis for the period ended March 31, exceeding its earlier guidance of 54 to 57 cents per share.

Comparable earnings in the same 2012 quarter were US$26.9 million or 22 cents per share.

Net sales rose 8.4 per cent to US$503 million from US$482.6 million in the 2012 period.

Gildan said the growth in net earnings year over year was due to the benefit of significantly lower cotton costs together with higher unit sales volumes and a more favourable product mix for branded apparel.

That was partially offset by lower selling prices for printwear, including the four-cents per share US impact of a distributor inventory devaluation discount in the quarter, higher manufacturing costs and a charge for the discontinuation of Anvil product lines. The company also cited higher selling, general and administrative expenses and higher income taxes as a drag on results.

In its outlook, net sales revenue for fiscal 2013 now is projected to be slightly in excess of US$2.15 billion, while full-year adjusted EPS is expected to come in at between US$2.65 and US$2.70 — the upper end of its previous guidance range of US$2.60-$2.70 per share.

Gildan based its more optimistic outlook on the better-than-expected second-quarter results along with projected increases in supply chain and manufacturing efficiencies.