Canadian sportswear firm Gildan Activewear generated an 8.1 percent increase in Q4 activewear sales to $644.0 million, fueled by higher volumes at point-of-sale and stronger year-over-year customer replenishment. There was a strong sales performance from the fleece and ring-spun T-shirt segments.
Overall final period results, including sales of underwear and hosiery, showed a 92 percent increase in operating income to $178.1 million from $92.6 million in the year-ago period, as total revenues jumped by 8.7 percent to $782.7 million from $720.0 million. Sales outside of North America fell by 24 percent to $53.5 million, despite some point-of-sale recovery, due to challenging macroeconomic conditions and lower inventory replenishment by customers. Net income was 83 percent higher year-over-year at $153.3 million. Adjusted gross margin improved by 110 basis points to 30.2 percent, largely due to lower raw material costs.
For the full year, activewear sales declined by 3.4 percent to $2,668.0 million from $2,762.5 million, and adjusted net income slid by 21 percent to $452.6 million from $574.7 million. Total sales in non-North American markets slipped by 17 percent year-over-year to $225.4 million. FY23 operating income was 6.7 percent higher to 6.7 percent to $643.9 million despite a 1.4 percent contraction in total net sales to $3.2 billion and a 240-basis point drop in adjusted gross margin to 27.4 percent. Year-end inventories were down by 11.1 percent at $1,089.4 million.
Meanwhile, the group’s current FY24 outlook calls for the adjusted operating margin to come in “slightly above” a target range of 18-20 percent but total revenues to be flat to up low single digits.
Gildan President and CEO Vince Tyra told analysts that the “ramp up” of the company’s new facility in Bangladesh is underway and should be approximately 75 percent by the end of 2024. The group’s stock levels were described as “in great shape.”
The company is forecasting a weaker start to FY24, with strength building in the subsequent three periods, helped by competitive strength in key product categories.
