Canadian sportswear brand Gildan Activewear delivered net sales of US$870 million in the third quarter ended Oct. 1, 2023, up 2.3 percent over $850 million in last year’s third quarter, as the company moved past the impact of strong prior year comparative periods tied to post-pandemic replenishment. The company generated a gross profit of $239 million, or 27.5 percent of sales in the third quarter, down $13 million and 220 basis points, respectively, versus the prior year. The lower gross margin was primarily driven by higher raw materials and manufacturing input costs, as well as slightly lower net selling prices. Operating income of $155 million, or 17.8 percent of sales, and adjusted operating income of $157 million, or 18.1 percent of sales, were down 270 and 190 basis points, respectively, compared to the prior year, reflecting the lower gross margin and adjusted gross margin. Net earnings for the quarter of $127.4 million were down 16.7 percent from the preceding year.
Activewear sales were $744 million, while sales in the Hosiery and underwear category were $126 million. Activewear sales were essentially flat during the quarter, with international sales for this category down 23 percent during the quarter versus the prior year due to lower demand and price pressures across all markets.
The company said third-quarter performance was “overall in line with its expectations,” as it resumed its sales growth trajectory and delivered operating margin within its target range. The company expects revenues to grow in the fourth quarter against an easier comparison in the prior year. However, Gildan updated its fiscal guidance and now expects full-year revenues and earnings per share to be at the lower end of the previously provided range to reflect softer demand trends in certain markets that stem from the macro environment.
While communicating its Q3 results, the company also announced the appointment of Sharon Driscoll to its board of directors, bringing Gildan’s board to eleven members. Driscoll will serve on the Audit and Finance Committee and Compensation and Human Resources Committee.
