Sales climbed sharply last year for Montreal-based supplier Gildan Active wear (PPAI 250187, S13). In its financial report for fiscal fourth quarter and full-year 2021, which ended January 2, 2022, the company posted fourth quarter 2021 sales of $784 million, up 14% from last year and 19% from fourth quarter 2019—the last “normal” year—and full-year 2021 sales of $2.9 billion, up 48% from fiscal year 2020 and 3.5% above fiscal year 2019.

“I am extremely proud of our team’s performance in 2021 which allowed us to capitalize on improving demand and deliver meaningful benefits from our Back to Basics strategy. We ended the year with a strong finish, growing above pre-pandemic levels and setting record results to build on,” says Glenn J. Chamandy, president and CEO of Gildan. "As we look to 2022 and beyond, we are building on our Back to Basics principles and heightening our focus towards the next phase of our journey with our ‘Gildan Sustainable Growth’ plan centered on three key pillars—enabling growth through capacity expansion, innovation and ESG [Environmental, Social, and Governance].

“By leveraging our competitive advantage as a low-cost, vertically integrated manufacturer and executing on projected capacity expansion plans, delivering superior quality, value-driven and innovative products to our customers, and leveraging our strong ESG standing, we are confident that we can drive strong organic revenue growth, profitability and effective asset utilization to deliver strong shareholder value and make meaningful advancements on our ESG priorities.”

Fourth quarter 2021’s sales of $784 million included $627 million in active wear sales, up 17%, and $157 million in the hosiery and underwear category, up 3% compared to the prior year quarter. The company attributes the overall sales increase largely to higher active wear sales volumes and net selling prices, partly offset by weaker product-mix related to the year-over-year timing of fleece sales.

The growth in active wear sales volumes reflected the combination of higher point of sales and to a lesser extent the impact of some distributor restocking in the North American imprintables channel, although inventory levels in the North American imprintables channel continue to remain well below pre-pandemic levels. Gildan generated a gross profit of $229 million in the fourth quarter, and adjusted gross profit of $240 million, up 48% and 35%, respectively, over the prior year, driven by growth in sales and strong margin performance.

Looking at the full year 2021’s results, Gildan’s $2.9 billion in sales reflected an increase of 58% in activewear and 16% in the hosiery and underwear category compared to 2020. The company noted that its sales performance in 2021 reflected a significant recovery in demand from 2020, which was hard hit by the effects of the onset of the COVID-19 pandemic. Compared to 2019, sales growth showed improvement through the year, with sales returning to above pre-pandemic levels in the second half. The year-over-year increase in active wear sales, to $2.37 billion in 2021, was attributed to strong volume increases in all channels, a favorable product-mix and higher net selling prices. The overall sales increase in the hosiery and underwear category—the category generated $558 million in sales in 2021—was driven by higher sales volumes in both underwear and sock products compared to last year, as well as favorable product mix. Gildan produced a gross profit of $940 million in 2021, compared to $249 million in the prior year. On an adjusted basis, gross profit for 2021 totaled $903 million compared to $306 million in 2020.

"We are pleased with the success of our Back to Basics strategy which structurally improved the economics of our business, allowing us to deliver top tier profitability in 2021 with operating margin performance above our 18% target," says Chamandy. "Today, we stand as a less complex, more competitively advantaged organization, stronger than we have ever been and well-positioned for sustainable growth."