Gildan Activewear Inc. (NYSE:GIL) shares rose more than 3% in premarket trading Wednesday after the Montreal-based apparel maker reported record third-quarter adjusted earnings, demonstrating solid profitability even as revenue came in slightly below expectations.
The company posted adjusted earnings of $1.00 per share, narrowly topping the consensus estimate of $0.99. Revenue totaled $911 million, missing forecasts of $922.49 million, but still marking a 2.2% year-over-year increase. Growth was led by the Activewear segment, which accounts for most of Gildan’s business and rose 5.4% to $831 million.
“We were pleased with this quarter’s results as we continue to drive profitable growth, supported by strong net sales growth of 5.4% in Activewear which allowed us to deliver record adjusted diluted EPS,” said Glenn J. Chamandy, Gildan’s President and CEO.
The company achieved a record adjusted operating margin of 23.2%, an improvement of 80 basis points from the prior-year period. The margin expansion was attributed to lower manufacturing costs and favorable pricing, which helped offset early tariff-related impacts.
Looking forward, Gildan narrowed its full-year 2025 earnings outlook to a range of $3.45 to $3.51 per share, compared with the analyst consensus of $3.46. The company also raised its adjusted operating margin guidance, now expecting an increase of approximately 70 basis points for the year, versus the previous projection of 50 basis points.
The strong results come as Gildan moves ahead with its planned $4.4 billion acquisition of HanesBrands, announced in August. The transaction is expected to close later this year or in early 2026, positioning the company to expand its global footprint.
“Our keen focus on execution, combined with Gildan’s low-cost vertically integrated business model, will be further enhanced by the added capabilities and reach introduced through the HanesBrands acquisition,” Chamandy added.
For the full year, Gildan now expects free cash flow of around $400 million, down from prior guidance of above $450 million, while capital expenditures are projected to account for 4% of sales, slightly below the earlier forecast of 5%.