Gildan Reports Sales Increase In Q1; Looks For More Organic Growth By Year End
Supplier Gildan Activewear has released financial results for the quarter ending April 2 and reconfirmed its full-year guidance for 2017. The Montreal, Quebec-based company reported sales of $665.4 million in the first quarter, a 12.2-percent increase compared to the same period in 2016.
Gildan attributes the quarter’s performance to acquisitions and organic growth. Growth in its sales and operating margin produced a 39-percent increase in its adjusted diluted earnings per share (EPS) compared to the first quarter of 2016, and free cash flow was up compared to the previous year due to strong working capital management and lower capital expenditures.
The 12.2-percent sales growth during the quarter reflects a 13.6-percent increase in the printwear segment and 9.2 percent in branded apparel. These increases, Gildan reports, come from acquisitions of Alstyle and Peds in 2016, the American Apparel acquisition that closed at the beginning of 2017, and growth driven by the higher net selling prices and a favorable product mix. Pulling this result down some was unfavorable foreign exchange rates and the planned exit of private label programs by its branded apparel segment.
Looking ahead to the rest of 2017, Gildan expects adjusted diluted EPS in the $1.60-$1.70 range, and its printwear and branded apparel channels to produce net sales increases in the high single-digit range, driven by organic growth and the projected aggregate impact of approximately $160 to $185 million from the acquisitions of Alstyle, Peds and American Apparel. Higher raw material costs are projected to weigh down earnings growth during the second half of the year. It expects EBITDA for 2017 of $555-$585 million, and more than $400 million in free cash flow.