- Record Q2 GAAP diluted EPS of $0.51 and adjusted diluted EPS1
of $0.52, up 6% over last year
- Organic net sales growth of approximately 7%
- Continued growth momentum in imprintable fashion basics
- International sales up 35% for the quarter
- Sales and adjusted diluted EPS guidance updated to higher end
of range
- $98 million of free cash flow1 generated in the quarter
- Free cash flow for the full year now expected to exceed $425
million
- Company increases size of existing NCIB program to up to 10% of
public float
(1) Please refer to "Definition and reconciliation of non-GAAP
financial measures" in this press release.
(all amounts are in U.S. dollars except where otherwise
indicated)
Gildan Activewear Inc. (TSX:GIL) (NYSE:GIL) today announced its
results for the second quarter ended July 1, 2018, updated its
full year guidance and announced that it has increased the common
share allotment of its current normal course issuer bid (NCIB)
program.
The Company reported record second quarter sales and adjusted
diluted EPS ahead of its expectations, setting the Company on
the path to achieve the higher end of its full year guidance range
for both sales and adjusted diluted EPS. Strong sales
momentum in key growth areas such as fashion basics and
international markets continued during the second quarter. Adjusted
diluted EPS for the quarter was up 6.1%, largely in line with sales
growth, despite higher manufacturing and supply chain costs in the
quarter, partly offset by a 50 basis point improvement in SG&A
expenses as a percentage of sales. SG&A leverage reflected the
benefit of cost reductions resulting from the Company’s recent
organizational consolidation which is progressing well. During the
second quarter, the Company generated $98 million of free cash flow
and now expects its free cash flow for the full year to be in
excess of $425 million, compared to its previous guidance of in
excess of $400 million. Shortly after the end of the second
quarter, the Company completed the repurchase of the full share
allotment pursuant to its NCIB program and today announced Board
and Toronto Stock Exchange approval to increase the size of its
program to up to 10% of the public float as at February 15,
2018.
Operating resultsNet sales of $764.2 million in
the second quarter ended July 1, 2018, were up 6.8% compared
to the prior year driven by a 17.3% increase in activewear sales.
The sales increase in activewear was driven by strong shipments of
imprintable products, as well as increased shipments to global
lifestyle brand customers and retailers. International sales in the
second quarter were up 35.2%, reflecting strong growth momentum
across all markets. The increase in activewear sales also reflected
higher net selling prices, including the impact of foreign
exchange, and favourable product-mix, driven by strong double digit
growth in fleece shipments and growth in fashion basics. The
hosiery and underwear category declined 23.8% during the quarter
mainly due to the unit volume decline in socks at mass retailers,
which are shifting emphasis toward their own private label brands,
and lower licensed and Gold Toe® brand sales. In addition,
underwear shipments were down on a year over year basis for the
quarter, primarily due to the non-recurrence of shipments related
to the initial fill of expanded space gains in the prior year.
Gross margin in the second quarter of 2018 totaled 28.3%,
reflecting a 150 basis point decrease over the same period last
year. The decline was mainly due to higher raw material and other
input costs and additional manufacturing expenses resulting from
disruptions within our supply chain in Central America. The
unfavourable impact of these factors more than offset the benefit
of higher net selling prices, including foreign exchange, and the
positive impact of a richer product-mix.
As a percentage of sales, SG&A expenses for the second
quarter were 12.0%, down 50 basis points from the prior year
quarter. The improvement was mainly due to the benefit of
cost reductions resulting from the Company's recent organizational
consolidation, which more than offset increased costs related to
the enhancement of the Company's e-commerce and distribution
capabilities.
For the second quarter of 2018, the Company generated operating
income of $121.0 million and adjusted operating income1 of $124.0
million, flat compared to the same period last year. Operating
margin of 15.8% and adjusted operating margin1 of 16.2% were both
down 110 basis points compared to the second quarter of 2017
reflecting the decline in gross margin partly offset by SG&A
leverage.
Net earnings for the three months ended July 1, 2018
amounted to $109.0 million, or $0.51 per share on a diluted
basis, compared with net earnings of $107.7 million, or $0.48
per share on a diluted basis for the same period last year.
Excluding the impact of after-tax restructuring and
acquisition-related costs, Gildan reported adjusted EPS of $0.52
per share on a diluted basis for the second quarter of 2018, up
6.1% from $0.49 per share on a diluted basis in the same quarter
last year. The increase in adjusted diluted EPS was mainly due to
higher sales and the benefit of a lower share count compared to the
prior year, partly offset by a lower operating margin.
The Company generated $98.0 million of free cash flow in the
second quarter 2018 compared to $162.1 million in the same quarter
last year. The decline was mainly due to less favourable changes in
working capital and higher capital expenditures compared to the
same period last year, partly offset by higher net earnings.
Capital expenditures of $32.3 million in the quarter were
primarily for investments in textile and sewing capacity expansion,
distribution, and information technology. During the second quarter
of 2018, the Company repurchased 7,170,880 common shares at a total
cost of approximately $209 million, pursuant to its NCIB. The
Company ended the second quarter of 2018 with net debt1 of $858.6
million and a net debt leverage ratio1 of 1.5 times net debt
to trailing twelve months adjusted EBITDA1.
Year-to-date resultsNet sales of $1,411.5
million for the six months ended July 1, 2018 were up $30.8
million, or 2.2% compared to the same period last year. The sales
increase was driven by a 10.5% increase in activewear sales, partly
offset by a 22.2% decline in the hosiery and underwear sales
category. Activewear sales grew mainly as a result of strong
shipments in the second quarter across all major regions, including
a 30.2% year-to-date increase in international sales. Activewear
sales growth also reflected the benefit of higher net selling
prices, including foreign exchange, and favourable product-mix
compared to the same period last year. The decline in the hosiery
and underwear sales category was mainly due to lower unit sales of
socks, particularly to mass retailers which are shifting emphasis
toward their own private label brands, as well as the impact of the
non-recurrence of the initial roll-out of certain program gains
which occurred during the first half of the prior year.
Gross margin for the first six months of 2018 of 27.8% was down
130 basis points over the prior year, largely as a result of
increases in raw material and other input costs and additional
manufacturing costs related to disruptions within our supply chain
in Central America. These factors were partly offset by higher net
selling prices and the benefit of a richer product-mix compared to
the prior year.
SG&A expenses as a percentage of sales for the first half of
the year were 13.1% slightly up from 12.9% in the same period last
year, primarily due to planned increases in expenses related to the
enhancement of e-commerce and distribution capabilities, partly
offset by cost reductions resulting from the Company's recent
organizational consolidation. Operating margin and adjusted
operating margin for the first six months of 2018 were 14.0% and
14.6% respectively, compared to 15.5% and 16.2% in the same period
in the prior year.
Net earnings for the first six months of 2018 were $176.9
million, or $0.82 per share on a diluted basis compared to net
earnings of $191.2 million, or $0.84 per share on a diluted basis
for the same period last year. Before reflecting
after-tax restructuring and acquisition-related costs in both
years, adjusted net earnings were $186.1 million, or $0.86 per
share on a diluted basis in the first six months of 2018, compared
to adjusted net earnings of $200.6 million, or $0.88 per share on a
diluted basis in the same period last year. The decrease in net
earnings and adjusted net earnings was mainly due to a lower
operating margin, partly offset by the contribution from higher
sales and a lower income tax expense. On a diluted per share basis,
the decrease in net earnings and adjusted net earnings was also
partly offset by the benefit of a lower share count compared to the
prior year.
OutlookThe Company updated its full year 2018
financial guidance and is now projecting adjusted diluted EPS to be
in the range of $1.85 to $1.90 compared to its previous guidance of
$1.80 to $1.90. Net sales growth is now projected to be in the
mid-single-digit range, the upper end of the Company's previous
range of low to mid-single digit growth. The Company expects
adjusted EBITDA to be in the range of $605 to $620 million compared
to $595 to $620 million previously, and free cash flow for 2018 is
now expected to be in excess of $425 million for the year, higher
than its previous estimate of in excess of $400 million. Guidance
for capital expenditures remains at approximately $125 million for
2018.
The Company's updated guidance reflects better than anticipated
performance in the second quarter and higher projected activewear
sales, to be partly offset by lower projected sock sales and higher
manufacturing and supply chain costs than previously anticipated.
The Company is projecting double digit growth in activewear sales
for the full year, including continued strong growth trends in
fashion basics, fleece, and international markets. American
Apparel® sales are now expected to be at an exit run rate of close
to $100 million by the end of the year. Hosiery and underwear
sales for 2018 are now projected to be down approximately $85
million due to lower than previously anticipated sock sales.
SG&A cost savings resulting from the Company's organizational
consolidation are on track, positioning the Company to generate
expected improved SG&A as a percentage of sales in the range of
100 to 200 basis points in the third and fourth quarters of the
year compared to the prior year, as previously guided. Adjusted
operating margin for the year is now expected to be slightly down
compared to the prior year, as the Company absorbs incremental
manufacturing expenses which were not anticipated in its initial
guidance. For the balance of 2018, the Company is projecting
adjusted diluted EPS growth in the high-single-digit to
low-double-digit range in the third quarter, and strong
double-digit adjusted diluted EPS growth in the fourth quarter.
Declaration of quarterly dividendThe Board of
Directors has declared a cash dividend of $0.112 per share, payable
on September 10, 2018 to shareholders of record on
August 16, 2018. This dividend is an “eligible dividend” for
the purposes of the Income Tax Act (Canada) and any other
applicable provincial legislation pertaining to eligible
dividends.
Normal course issuer bidThe Company announced
today that it has received approval from the Toronto Stock Exchange
(TSX) to amend its current NCIB in order to increase the maximum
number of common shares that may be repurchased from 10,960,391
common shares, or approximately 5% of the Company’s issued and
outstanding common shares as at February 15, 2018 (the reference
date for the NCIB), to 21,575,761 common shares, representing
approximately 10% of the Company’s public float as at February 15,
2018. No other terms of the NCIB have been amended.
The NCIB, which began February 27, 2018 and will end no later
than February 26, 2019, is conducted by means of open market
transactions on both the TSX and the New York Stock Exchange
(NYSE), or alternative trading systems, if eligible, or by such
other means as a securities regulatory authority may permit,
including pre-arranged crosses or by private agreements under an
issuer bid exemption order issued by securities regulatory
authorities in Canada.
Under the TSX rules, any daily repurchases on the TSX are
limited to a maximum of 114,889 common shares, which represents 25%
of the average daily trading volume on the TSX for the six months
ended January 31, 2018. In addition, Gildan may make, once per
week, a block purchase of common shares not directly or indirectly
owned by insiders of Gildan, in accordance with TSX rules. All
shares purchased pursuant to the NCIB are cancelled.
The automatic purchase plan (ASPP) entered into with a
designated broker on March 23, 2018 also remains unchanged. The
ASPP allows for the purchase of common shares under the NCIB at
times when the Company would ordinarily not be permitted to
purchase its common shares due to regulatory restrictions or
self-imposed trading blackout periods. Outside of the
pre-determined blackout periods, common shares may be purchased
under the NCIB based on the discretion of the Company’s management,
in compliance with TSX rules and applicable securities laws.
During the period from February 27, 2018 to July
31, 2018, Gildan purchased and cancelled a total of 10,960,391
common shares, representing 5.1% of the Company’s public float and
5.0% of the Company’s issued and outstanding common shares as at
February 15, 2018.
Gildan’s management and the Board of Directors believe the
repurchase of the common shares represents an appropriate use of
Gildan’s financial resources and that share repurchases under the
NCIB will not preclude Gildan from continuing to pursue
complementary acquisitions.
Disclosure of outstanding share dataAs at
July 31, 2018, there were 208,130,849 common shares issued and
outstanding along with 2,741,957 stock options and 104,806 dilutive
restricted share units (Treasury RSUs) outstanding. Each stock
option entitles the holder to purchase one common share at the end
of the vesting period at a pre-determined option price. Each
Treasury RSU entitles the holder to receive one common share from
treasury at the end of the vesting period, without any monetary
consideration being paid to the Company.
Conference call informationGildan Activewear
Inc. will hold a conference call to discuss second quarter 2018
results and its business outlook today at 8:30 AM ET. A live
audio webcast of the conference call, as well as a replay, will be
available on its corporate site or on the following link:
http://www.gildancorp.com/events. The conference call can be
accessed by dialing (800) 447-0521 (Canada & U.S.) or (847)
413-3238 (international) and entering passcode 47165200#. A replay
will be available for 7 days starting at 11:00 AM ET by dialing
(888) 843-7419 (Canada & U.S.) or (630) 652-3042
(international) and entering the same passcode.
NotesThis release should be read in conjunction
with Gildan’s Management’s Discussion and Analysis and its
unaudited condensed interim consolidated financial statements as at
and for the three and six months ended July 1, 2018 available on
Gildan's corporate website, which will be filed by Gildan with the
Canadian securities regulatory authorities and with the U.S.
Securities and Exchange Commission.
Certain minor rounding variances may exist between the unaudited
condensed interim consolidated financial statements and the table
summaries contained in this press release.
Supplemental Financial Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED FINANCIAL DATA (UNAUDITED) |
|
|
|
|
|
|
|
(in U.S.$ millions, except per share amounts or
otherwise indicated) |
Q2 2018 |
Q2 2017 |
Variation(%) |
YTD 2018 |
YTD 2017 |
Variation(%) |
Net
sales |
764.2 |
715.4 |
6.8% |
1,411.5 |
1,380.7 |
2.2% |
Gross
profit |
215.9 |
213.3 |
1.2% |
391.7 |
402.0 |
(2.6)% |
SG&A
expenses |
91.9 |
89.3 |
2.9% |
185.0 |
178.6 |
3.6% |
Restructuring and acquisition-related costs |
3.0 |
2.8 |
7.1% |
9.4 |
9.4 |
— % |
Operating
income |
121.0 |
121.1 |
(0.1)% |
197.3 |
214.1 |
(7.8)% |
Adjusted
operating income(1) |
124.0 |
123.9 |
0.1% |
206.7 |
223.5 |
(7.5)% |
Adjusted
EBITDA(1) |
166.0 |
165.4 |
0.4% |
290.1 |
304.3 |
(4.7)% |
Financial
expenses |
8.0 |
7.6 |
5.3% |
13.2 |
12.3 |
7.3% |
Income tax
expense |
4.0 |
5.8 |
(31.0)% |
7.2 |
10.6 |
(32.1)% |
Net
earnings |
109.0 |
107.7 |
1.2% |
176.9 |
191.2 |
(7.5)% |
Adjusted
net earnings(1) |
111.5 |
110.5 |
0.9% |
186.1 |
200.6 |
(7.2)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
EPS |
0.51 |
0.48 |
6.3% |
0.82 |
0.84 |
(2.4)% |
Diluted
EPS |
0.51 |
0.48 |
6.3% |
0.82 |
0.84 |
(2.4)% |
Adjusted
diluted EPS(1) |
0.52 |
0.49 |
6.1% |
0.86 |
0.88 |
(2.3)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
28.3% |
29.8% |
(1.5) pp |
27.8% |
29.1% |
(1.3) pp |
SG&A
expenses as a percentage of sales |
12.0% |
12.5% |
(0.5) pp |
13.1% |
12.9% |
0.2 pp |
Operating
margin |
15.8% |
16.9% |
(1.1) pp |
14.0% |
15.5% |
(1.5) pp |
Adjusted operating margin(1) |
16.2% |
17.3% |
(1.1) pp |
14.6% |
16.2% |
(1.6) pp |
|
|
|
|
|
|
|
Cash flows
from operating activities |
130.3 |
179.9 |
(27.6)% |
112.7 |
245.7 |
(54.1)% |
Free cash flow(1) |
98.0 |
162.1 |
(39.5)% |
58.1 |
203.3 |
(71.4)% |
|
|
|
As at |
Jul 1, 2018 |
Dec 31, 2017 |
Inventories |
969.7 |
945.7 |
Trade accounts receivable |
383.6 |
243.4 |
Net indebtedness(1) |
858.6 |
577.2 |
Net debt leverage ratio(1) |
1.5 |
1.0 |
(1) Please refer to "Definition and reconciliation of
non-GAAP financial measures" in this press release. |
DISAGGREGATION OF REVENUE
Net sales by major product group were as follows:
(in U.S.$ millions or otherwise indicated) |
Q2 2018 |
Q2 2017 |
Variation (%) |
YTD 2018 |
YTD 2017 |
Variation (%) |
Activewear |
625.2 |
533.0 |
17.3 % |
1,139.7 |
1,031.5 |
10.5 % |
Hosiery and underwear |
139.0 |
182.4 |
(23.8) % |
271.8 |
349.2 |
(22.2) % |
|
764.2 |
715.4 |
6.8 % |
1,411.5 |
1,380.7 |
2.2 % |
|
|
|
|
|
|
|
Net sales were derived from customers located in the following
geographic areas:
(in U.S.$ millions or otherwise indicated) |
Q2 2018 |
Q2 2017 |
Variation (%) |
YTD 2018 |
YTD 2017 |
Variation (%) |
United
States |
644.7 |
615.4 |
4.8 % |
1,200.5 |
1,195.9 |
0.4 % |
Canada |
30.1 |
33.9 |
(11.2) % |
55.5 |
65.4 |
(15.1) % |
International |
89.4 |
66.1 |
35.2 % |
155.5 |
119.4 |
30.2 % |
|
764.2 |
715.4 |
6.8 % |
1,411.5 |
1,380.7 |
2.2 % |
Definition and reconciliation of non-GAAP financial
measuresThis press release includes references to certain
non-GAAP financial measures as described below. These non-GAAP
measures do not have any standardized meanings prescribed by
International Financial Reporting Standards (IFRS) and are
therefore unlikely to be comparable to similar measures presented
by other companies. Accordingly, they should not be considered in
isolation. The terms and definitions of the non-GAAP measures used
in this press release and a reconciliation of each non-GAAP measure
to the most directly comparable IFRS measure are provided
below.
Adjusted net earnings and adjusted diluted EPSAdjusted net
earnings are calculated as net earnings before restructuring and
acquisition-related costs, including related income tax expenses
and recoveries. Adjusted diluted EPS is calculated as adjusted net
earnings divided by the diluted weighted average number of common
shares outstanding. The Company uses adjusted net earnings and
adjusted diluted EPS to measure its performance from one period to
the next without the variation caused by the impacts of the items
described above. The Company excludes these items because they
affect the comparability of its financial results and could
potentially distort the analysis of trends in its business
performance. Excluding these items does not imply they are
necessarily non-recurring.
(in U.S.$ millions, except per share amounts) |
Q2 2018 |
Q2 2017 |
YTD 2018 |
YTD 2017 |
Net
earnings |
109.0 |
107.7 |
176.9 |
191.2 |
Adjustments
for: |
|
|
|
|
Restructuring and acquisition-related costs |
3.0 |
2.8 |
9.4 |
9.4 |
Income tax recovery relating to restructuring and
acquisition-related costs |
(0.5) |
— |
(0.2) |
— |
Adjusted net earnings |
111.5 |
110.5 |
186.1 |
200.6 |
Basic
EPS |
0.51 |
0.48 |
0.82 |
0.84 |
Diluted
EPS |
0.51 |
0.48 |
0.82 |
0.84 |
Adjusted diluted EPS |
0.52 |
0.49 |
0.86 |
0.88 |
Adjusted operating income and adjusted operating
marginAdjusted operating income is calculated as operating income
before restructuring and acquisition-related costs. Adjusted
operating margin is calculated as adjusted operating income divided
by net sales. Management uses adjusted operating income and
adjusted operating margin to measure its performance from one
period to the next without the variation caused by the impacts of
the items described above. The Company excludes these items because
they affect the comparability of its financial results and could
potentially distort the analysis of trends in its business
performance. Excluding these items does not imply they are
necessarily non-recurring.
(in U.S.$ millions, or otherwise indicated) |
Q2 2018 |
Q2 2017 |
YTD 2018 |
YTD 2017 |
Operating
income |
121.0 |
121.1 |
197.3 |
214.1 |
Adjustment
for: |
|
|
|
|
Restructuring and acquisition-related costs |
3.0 |
2.8 |
9.4 |
9.4 |
Adjusted operating income |
124.0 |
123.9 |
206.7 |
223.5 |
|
|
|
|
|
Operating
margin |
15.8 % |
16.9 % |
14.0 % |
15.5 % |
Adjusted operating margin |
16.2 % |
17.3 % |
14.6 % |
16.2 % |
Adjusted EBITDAAdjusted EBITDA is calculated as
earnings before financial expenses, income taxes, and depreciation
and amortization, and excludes the impact of restructuring and
acquisition-related costs. The Company uses adjusted EBITDA,
among other measures, to assess the operating performance of its
business. The Company also believes this measure is commonly used
by investors and analysts to measure a company’s ability to service
debt and to meet other payment obligations, or as a common
valuation measurement. The Company excludes depreciation and
amortization expenses, which are non-cash in nature and can vary
significantly depending upon accounting methods or non-operating
factors. Excluding these items does not imply they are necessarily
non-recurring.
(in U.S.$ millions) |
Q2 2018 |
Q2 2017 |
YTD 2018 |
YTD 2017 |
Net
earnings |
109.0 |
107.7 |
176.9 |
191.2 |
Restructuring and acquisition-related costs |
3.0 |
2.8 |
9.4 |
9.4 |
Depreciation and amortization |
42.0 |
41.5 |
83.4 |
80.8 |
Financial
expenses, net |
8.0 |
7.6 |
13.2 |
12.3 |
Income tax expense |
4.0 |
5.8 |
7.2 |
10.6 |
Adjusted EBITDA |
166.0 |
165.4 |
290.1 |
304.3 |
Free cash flowFree cash flow is defined as cash
from operating activities less cash flow used in investing
activities excluding business acquisitions. The Company considers
free cash flow to be an important indicator of the financial
strength and liquidity of its business, and it is a key metric
which indicates how much cash is available after capital
expenditures to repay debt, to pursue business acquisitions, and/or
to redistribute to its shareholders. The Company believes this
measure is commonly used by investors and analysts when valuing a
business and its underlying assets.
(in U.S.$ millions) |
Q2 2018 |
Q2 2017 |
YTD 2018 |
YTD 2017 |
Cash flows
from operating activities |
130.3 |
179.9 |
112.7 |
245.7 |
Cash flows
used in investing activities |
(32.3) |
(26.9) |
(54.7) |
(144.5) |
Adjustment
for: |
|
|
|
|
Business acquisitions |
— |
9.1 |
0.1 |
102.1 |
Free cash flow |
98.0 |
162.1 |
58.1 |
203.3 |
Total indebtedness and net indebtednessTotal
indebtedness is defined as the total bank indebtedness and
long-term debt (including any current portion), and net
indebtedness is calculated as total indebtedness net of cash and
cash equivalents. The Company considers total indebtedness and net
indebtedness to be important indicators of the financial leverage
of the Company.
(in U.S.$ millions) |
Jul 1, 2018 |
Dec 31, 2017 |
Long-term
debt and total indebtedness |
900.0 |
630.0 |
Cash and cash equivalents |
(41.4) |
(52.8) |
Net indebtedness |
858.6 |
577.2 |
Net debt leverage ratioThe net debt leverage
ratio is defined as the ratio of net indebtedness to pro-forma
adjusted EBITDA for the trailing twelve months. The pro-forma
adjusted EBITDA for the trailing twelve months reflects business
acquisitions made during the period as if they had occurred at the
beginning of the trailing twelve month period. The Company has set
a target net debt leverage ratio of one to two times pro-forma
adjusted EBITDA for the trailing twelve months. The Company uses,
and believes that certain investors and analysts use, the net debt
leverage ratio to measure the financial leverage of the
Company.
(in U.S.$ millions, or otherwise indicated) |
Jul 1, 2018 |
Dec 31, 2017 |
Adjusted
EBITDA for the trailing twelve months |
571.8 |
586.1 |
Adjustment
for: |
|
|
Business acquisitions |
— |
0.3 |
Pro-forma adjusted EBITDA for the trailing twelve
months |
571.8 |
586.4 |
Net
indebtedness |
858.6 |
577.2 |
Net debt leverage ratio |
1.5 |
1.0 |
|
Caution concerning forward-looking
statementsCertain statements included in this press
release constitute “forward-looking statements” within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995 and
Canadian securities legislation and regulations, and are subject to
important risks, uncertainties, and assumptions. This
forward-looking information includes, amongst others, information
with respect to our objectives and the strategies to achieve these
objectives, as well as information with respect to our beliefs,
plans, expectations, anticipations, estimates, and intentions,
including, without limitation, our expectation with regards to net
sales, adjusted diluted earnings per share, SG&A expenses,
adjusted operating margin, income tax rate, adjusted EBITDA, free
cash flow, and capital expenditures. Forward-looking statements
generally can be identified by the use of conditional or
forward-looking terminology such as “may”, “will”, “expect”,
“intend”, “estimate”, “project”, “assume”, “anticipate”, “plan”,
“foresee”, “believe” or “continue”, or the negatives of these terms
or variations of them or similar terminology. We refer you to the
Company’s filings with the Canadian securities regulatory
authorities and the U.S. Securities and Exchange Commission, as
well as the risks described under the “Financial risk management”,
“Critical accounting estimates and judgments”, and “Risks and
uncertainties” sections of the Company’s Management’s Discussion
and Analysis for the three and six months ended July 1, 2018 and
for the fiscal year ended December 31, 2017 for a discussion of the
various factors that may affect the Company’s future results.
Material factors and assumptions that were applied in drawing a
conclusion or making a forecast or projection are also set out
throughout such documents and this press release.
Forward-looking information is inherently uncertain and the
results or events predicted in such forward-looking information may
differ materially from actual results or events. Material factors,
which could cause actual results or events to differ materially
from a conclusion, forecast, or projection in such forward-looking
information, include, but are not limited to:
- our ability to implement our growth strategies and plans;
- our ability to successfully integrate acquisitions and realize
expected benefits and synergies;
- the intensity of competitive activity and our ability to
compete effectively;
- changes in general economic and financial conditions globally
or in one or more of the markets we serve;
- our reliance on a small number of significant customers;
- the fact that our customers do not commit to minimum quantity
purchases;
- our ability to anticipate, identify, or react to changes in
consumer preferences and trends;
- our ability to manage production and inventory levels
effectively in relation to changes in customer demand;
- fluctuations and volatility in the price of raw materials used
to manufacture our products, such as cotton, polyester fibers, dyes
and other chemicals;
- our reliance on key suppliers and our ability to maintain an
uninterrupted supply of raw materials and finished goods;
- the impact of climate, political, social, and economic risks in
the countries in which we operate or from which we source
production;
- disruption to manufacturing and distribution activities due to
such factors as operational issues, disruptions in transportation
logistic functions, labour disruptions, political or social
instability, bad weather, natural disasters, pandemics, and other
unforeseen adverse events;
- compliance with applicable trade, competition, taxation,
environmental, health and safety, product liability, employment,
patent and trademark, corporate and securities, licensing and
permits, data privacy, bankruptcy, anti-corruption, and other laws
and regulations in the jurisdictions in which we operate;
- the imposition of trade remedies, or changes to duties and
tariffs, international trade legislation, bilateral and
multilateral trade agreements and trade preference programs that
the Company is currently relying on in conducting its manufacturing
operations or the application of safeguards thereunder;
- factors or circumstances that could increase our effective
income tax rate, including the outcome of any tax audits or changes
to applicable tax laws or treaties;
- changes to and failure to comply with consumer product safety
laws and regulations;
- changes in our relationship with our employees or changes to
domestic and foreign employment laws and regulations;
- negative publicity as a result of actual, alleged, or perceived
violations of labour and environmental laws or international labour
standards, or unethical labour or other business practices by the
Company or one of its third- party contractors;
- changes in third party licensing arrangements and licensed
brands;
- our ability to protect our intellectual property rights;
- operational problems with our information systems as a result
of system failures, viruses, security and cyber security breaches,
disasters, and disruptions due to system upgrades or the
integration of systems;
- an actual or perceived breach of data security;
- our reliance on key management and our ability to attract
and/or retain key personnel;
- changes in accounting policies and estimates; and
- exposure to risks arising from financial instruments, including
credit risk, liquidity risk, foreign currency risk, and interest
rate risk, as well as risks arising from commodity prices.
These factors may cause the Company’s actual performance and
financial results in future periods to differ materially from any
estimates or projections of future performance or results expressed
or implied by such forward-looking statements. Forward-looking
statements do not take into account the effect that transactions or
non-recurring or other special items announced or occurring after
the statements are made, may have on the Company’s business. For
example, they do not include the effect of business dispositions,
acquisitions, other business transactions, asset write-downs, asset
impairment losses, or other charges announced or occurring after
forward-looking statements are made. The financial impact of such
transactions and non-recurring and other special items can be
complex and depends on the facts particular to each of them.
There can be no assurance that the expectations represented by
our forward-looking statements will prove to be correct. The
purpose of the forward-looking statements is to provide the reader
with a description of management’s expectations regarding the
Company’s future financial performance and may not be appropriate
for other purposes. Furthermore, unless otherwise stated, the
forward-looking statements contained in this press release are made
as of the date of this press release, and we do not undertake any
obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information,
future events, or otherwise unless required by applicable
legislation or regulation. The forward-looking statements contained
in this press release are expressly qualified by this cautionary
statement.
About GildanGildan is a leading
manufacturer of everyday basic apparel which markets its products
in North America, Europe, Asia-Pacific, and Latin America, under a
diversified portfolio of Company-owned brands, including Gildan®,
American Apparel®, Comfort Colors®, Gildan® Hammer™, Gold Toe®,
Anvil®, Alstyle®, Secret®, Silks®, Kushyfoot®, Secret Silky®,
Therapy Plus™, Peds® and MediPeds®, and under the Under Armour®
brand through a sock licensing agreement providing exclusive
distribution rights in the United States and Canada. Our product
offering includes activewear, underwear, socks, hosiery, and
legwear products sold to a broad range of customers, including
wholesale distributors, screenprinters or embellishers, as well as
to retailers that sell to consumers through their physical stores
and/or e-commerce platforms. In addition, we sell directly to
consumers through our own direct-to-consumer platforms.
Gildan owns and operates vertically integrated, large-scale
manufacturing facilities which are primarily located in Central
America, the Caribbean Basin, North America, and Bangladesh. With
over 50,000 employees worldwide Gildan operates with a strong
commitment to industry-leading labour and environmental practices
throughout its supply chain in accordance with its comprehensive
Genuine Responsibility™ program embedded in the Company's long-term
business strategy. More information about the Company and its
corporate citizenship practices and initiatives can be found at
www.gildancorp.com and www.genuineresponsibility.com,
respectively.
Investor inquiries:Sophie ArgiriouVice
President, Investor Communications(514)
343-8815sargiriou@gildan.com
Media inquiries:Garry BellVice President,
Corporate Marketing and Communications(514)
744-8600gbell@gildan.com
Gildan Activewear (NYSE:GIL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Gildan Activewear (NYSE:GIL)
Historical Stock Chart
From Apr 2023 to Apr 2024