Gildan Activewear reported first quarter net sales of 696 million dollars, down 1 percent over the prior year driven by lower net selling prices and unfavourable mix.
Meanwhile Browning West, which is campaigning to bring back former Gildan CEO Glenn Chamandy, urged its fellow shareholders to vote for all its eight director candidates at the upcoming AGM. The letter sent to the shareholders stated that at this year’s annual meeting, shareholders are faced with a clear leadership choice: risk a share price collapse with repeated value destroyer Vince Tyra, or supercharge shareholder returns with legendary value creator Glenn Chamandy.
Commenting on the trading update, Vince Tyra, Gildan’s president and CEO said in a statement, “Our solid first quarter performance highlights the strength of our business model and our strong focus on executing on our priorities. The quarter included several bright spots, including continued market momentum in ring spun and fleece products.”
The company’s first quarter activewear sales of 592 million dollars, were up 1 percent, while international sales were up 1 percent. In the hosiery and underwear category, sales were down 10 percent.
The company generated gross profit of 211 million dollars or 30.3 percent and adjusted gross margins were 30.3 percent, representing a 410 basis point improvement. Gildan’s operating income was 105 million dollars or 15.1 percent, while adjusted operating income was 126 million dollars or 18 percent of net sales, up 23 million dollars or 340 basis points. GAAP diluted EPS for the quarter of 47 cents, was down 13 percent, while adjusted diluted EPS was 59 cents, up 31 percent year over year.
During the recent investor update, the company reconfirmed its full year guidance including revenue growth to be flat to up low-single digits; adjusted operating margin slightly above the high end of the 18 percent to 20 percent target range and adjusted diluted EPS in the range of 2.92 dollars to 3.07 dollars, up between 13.5 percent and 19.5 percent year over year. Second quarter net sales are expected to be flat to up low single digits.
The company’s board has declared a cash dividend of 0.205 cents per share, payable on June 17, 2024 to shareholders of record as of May 23, 2024.