Gildan Activewear Reports Strong Results for the Third Quarter of 2022

November 3, 2022 – “The strength of our activewear business, driven by North American imprintables sales, together with the benefits from our vertically-integrated manufacturing model, allowed us to deliver another strong quarter” said Glenn J. Chamandy, Gildan’s President and CEO. “These results are a testament to the progress we are making under the Gildan Sustainable Growth strategy, which we remain fully focused on as we continue to drive to deliver on our three-year targets.” 

Gildan generated record third quarter sales of $850 million, up 6% year-over-year, as activewear sales to North American imprintable distributors held up well in the quarter, driven by higher net selling prices and sales volumes.  Sales consisted of activewear sales of $742 million, up 13%, and sales in the hosiery and underwear category of $108 million, down 26% over the prior year. The increase in activewear sales was due to higher net selling prices, partly offset by lower sales volumes, as increased unit sales to North American distributors were more than offset by lower unit sales volumes of activewear stemming from demand weakness in retail and international markets. In the hosiery and underwear category, the sales decline compared to last year was driven by weak demand in retail and the impact of retailers managing their inventory levels. We generated gross and adjusted gross profit1 of $252 million in the quarter, down $30 million from gross profit of $282 million last year. After adjusting for the benefit of a net insurance gain of approximately $30 million recorded in the third quarter of 2021, adjusted gross profit was flat year over year, as the sales growth in the quarter was offset by lower gross and adjusted gross margin1 compared to last year. Although we have been able to sustain strong margin performance, gross and adjusted gross margins of 29.7% in the quarter were down 540 basis points and 170 basis points, respectively, compared to last year. The decline in gross margin on a GAAP basis included the impact of the nonrecurrence of a net insurance gain which benefited gross margin last year by close to 375 basis points. Excluding this impact, the gross margin and adjusted gross margin decline reflected the impact of higher raw material and other

Year-to-date Operating Results

Net sales for the nine months ended October 2, 2022, were $2,520 million, up 18% over the same period last year, reflecting an increase of 25% in activewear sales, partly offset by a decline of 12% in the hosiery and underwear category. The year-over-year increase in activewear sales where we generated sales of $2,167 million was primarily driven by higher net selling prices, higher unit sales volumes and favourable product-mix. Activewear volume growth reflected the meaningful recovery in demand from COVID-19, particularly in the first half of the year, and our ability to better service demand this year due to stronger inventory levels as compared to the prior year, which were impacted by the hurricanes in Central America in 2020 and yarn labour shortages.

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