Gildan posts record Q1 revenue as HanesBrands integration advances

Gildan Activewear posted record first-quarter net sales of $1.17 billion**, a 63.8 percent year-on-year increase driven by the December 2025 acquisition of** HanesBrands, as the Montreal-based basic apparel manufacturer maintained its full-year financial targets and said integration is ahead of cost-savings milestones.

The quarter is the first complete fiscal period in which HanesBrands’ operations are fully consolidated into Gildan’s accounts, making comparisons with the prior year of limited use for trend analysis. The HanesBrands Australian business has been classified as a discontinued operation since the December 2025 acquisition close and is excluded from the figures reported here.

Acquisition accounting drags reported profit; underlying margin tops forecast

Two one-time acquisition-related charges weighed on the headline numbers. A $106 million inventory fair value step-up — required under IFRS 3 Business Combinations when acquired inventory is remeasured to market value — reduced reported gross profit to $278 million, or 23.9 percent of net sales, from 31.2 percent a year earlier. A further $61 million in restructuring and acquisition-related costs pushed GAAP operating income to a $1 million loss.

Excluding these items, adjusted operating income rose 23 percent to $167 million. Adjusted operating margin was 14.3 percent, about 140 basis points above the company’s roughly 12.9 percent guidance, but down from 19.0 percent a year earlier. The company attributed the decline largely to HanesBrands’ higher structural selling, general and administrative (SG&A) cost base versus Gildan’s legacy business.

Gildan added it is on track to capture approximately $100 million in cost synergies for full-year 2026, with an annual run-rate target of approximately $250 million over the next three years. 

Wholesale volumes pulled back, while retail sales reshaped the group’s revenue mix.

Following the HanesBrands acquisition, Gildan has switched its revenue reporting from Activewear and Innerwear to two new channels: Wholesale, which includes distributors, screenprinters, embellishers and global lifestyle brand customers, and Retail, which includes mass merchants, national chains, specialty retailers, online platforms and direct-to-consumer.

Wholesale revenue fell 11.9 percent to $552 million, with the company citing a planned, temporary reduction in customer inventory levels across its combined channel network and the absence of pre-emptive buying ahead of tariffs that had inflated Q1 2025 figures.

Retail sales reached $614 million, up from $85 million in the same quarter last year. The increase largely reflects the consolidation of the HanesBrands brand portfolio rather than organic growth. Key underwear brands gained additional market share in the quarter.

Guidance reaffirmed as tariff exposure eases

Gildan reaffirmed its full-year 2026 guidance: net sales of $6.0 billion to $6.2 billion and adjusted operating margin of approximately 20 percent.

Gildan’s supply chain is largely concentrated in Central America and the Caribbean — jurisdictions covered by the Dominican Republic–Central America Free Trade Agreement (CAFTA-DR), which provides duty-free access to the US market. A February 2026 US Supreme Court ruling invalidating tariffs collected under the International Emergency Economic Powers Act (IEEPA) partially reduced the company’s cost exposure. A subsequent temporary 10 percent ad valorem tariff imposed under Section 122 of the Trade Act of 1974 does not apply to CAFTA-DR qualifying goods. Higher costs embedded in inventory from tariff payments made before these legal developments remain a near-term drag.

Guidance reaffirmed as tariff exposure eases

Gildan reaffirmed its full-year 2026 guidance: net sales of $6.0 billion to $6.2 billion and adjusted operating margin of approximately 20 percent, supported in part by easing tariff exposure.

Gildan’s supply chain is largely concentrated in Central America and the Caribbean — jurisdictions covered by the Dominican Republic–Central America Free Trade Agreement (CAFTA-DR), which provides duty-free access to the US market. The February 2026 US Supreme Court ruling invalidating tariffs collected under the IEEPA partially reduced the company’s cost exposure. A subsequent temporary 10 percent ad valorem tariff imposed does not apply to CAFTA-DR qualifying goods. Higher costs embedded in inventory from tariff payments made before these legal developments remain a near-term drag.