Gildan 2017 Sales Up 6.4 Percent; Structural Changes Announced
Supplier Gildan Activewear (PPAI 250187) has announced its financial results for the quarter and year ending December 31. The Montreal, Quebec-headquartered company has also announced the implementation of an organizational realignment and related executive management changes.
Gildan reports sales up 11.2 percent in fourth quarter, growth it attributes primarily to its printwear division’s performance. The division’s sales grew 27.6 percent in the quarter, excluding the impact of the American Apparel acquisition early in 2017. For the year, sales totaled $2.75 billion, up 6.4 percent compared to 2016 and were within Gildan's previous sales guidance.
Effective January 1, Gildan consolidated its organizational structure, combining its printwear and branded apparel businesses into one division that centralized marketing, merchandising, sales, distribution and administrative functions. The combined organization will be led by Michael R. Hoffman, president, sales, marketing and distribution, who was previously serving as president, printwear.
The company has said the changes were made to better leverage its go-to-market strategy across its brand portfolio and to drive greater operational efficiency across the organization, and better position it to capitalize on growth opportunities within the evolving industry landscape. In combining the two businesses, Gildan expects to create a leaner and more streamlined organization. Cost savings from the reorganization will be initially reinvested into ecommerce and distribution.
Printwear’s strong fourth quarter results contributed to the division’s full-year sales growth of 10.4 percent. Printwear sales in fourth quarter 2017 were $415.6 million, up from $325.8 million in fourth quarter 2016. Gildan attributes this to strong unit sales volume growth in both domestic and international markets, the benefit of a favorable product mix, a $16.6 million sales contribution from American Apparel and higher net selling prices compared to the fourth quarter in 2016. Excluding the impact of the American Apparel acquisition, sales in the quarter increased 22.5 percent organically.
Net sales for the branded apparel segment in the quarter were $238.1 million, down 9.2 percent from $262.1 million in fourth quarter 2016 mainly due to lower unit sales volumes of socks and activewear, an unfavorable product mix driven by a lower proportion of sales of higher-priced socks and activewear, and the impact of the planned exit of certain private label programs, partly offset by increased underwear sales and higher net selling prices.