On Thursday, Gildan Activewear Inc. (NYSE:GIL) delivered second-quarter results that outpaced analyst forecasts, driven by strong demand for activewear and improved profit margins.
Shares of the Montreal-based apparel company rose 0.49% in after-hours trading following the announcement.
The company reported adjusted earnings of $0.97 per share, surpassing the consensus estimate of $0.95. Revenue reached $919 million, beating the expected $907.46 million and marking a 6.5% increase from $862 million in the same quarter last year.
Activewear sales, which represent 87% of total revenue, surged 11.6% year-over-year to $822 million. This growth was fueled by higher sales volumes, a favorable product mix, and increased net selling prices. Gildan also expanded its market share in key growth areas and received a positive response to new products featuring innovations such as its Soft Cotton Technology.
“Our strong overall competitive positioning allowed us to continue benefiting from recent changes in the industry landscape,” said Glenn Chamandy, President and CEO. “We’re seeing solid momentum with North American distributors and National account customers.”
Gross margin improved to 31.5% from 30.4% in the prior-year quarter, mainly due to lower raw material and manufacturing costs along with favorable pricing. Adjusted operating margin held steady at 22.7%.
Meanwhile, sales in the hosiery and underwear segment declined 23.3% to $96 million, affected by lower volume and mix, broader market softness, and the discontinuation of the Under Armour (NYSE:UA) business.
For fiscal 2025, Gildan projects adjusted earnings per share between $3.40 and $3.56, compared to the analyst consensus of $3.47.
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