US' Gildan posts $3.27 bn revenue in FY24, sees strong profit growth

Activewear sales rose 6 per cent to $2,831 million, driven by increased shipments, positive point of sale (POS) trends in North America, and strong demand from national account customers, although slightly lower net selling prices offset some gains, Gildan said in a press release.

The gross profit of the company improved to $1,004 million, up $124 million from the previous year, with a gross margin of 30.7 per cent—an increase of 320 basis points—primarily due to lower raw material and manufacturing input costs, partially offset by slightly lower net selling prices.

Market share growth in key categories and the successful launch of innovative products further contributed to the increase. International sales reached $252 million, up 12 per cent, benefitting from demand stabilisation and distributor inventory replenishment. However, hosiery and underwear sales declined by 17 per cent due to the Under Armour phase-out, less favourable product mix, and broader market weakness in the underwear segment. Adjusting for this phase-out, hosiery and underwear sales recorded mid-single-digit growth YoY.

Selling, general, and administrative (SG&A) expenses rose to $391 million, $60 million higher than the previous year, mainly due to costs related to the proxy contest and leadership changes, which amounted to $83 million in 2024 compared to $6 million in 2023. Excluding these charges, adjusted SG&A expenses were $308 million, or 9.4 per cent of net sales, compared to $324 million, or 10.1 per cent, in 2023, reflecting cost benefits from the jobs credit introduced by Barbados in Q2 2024, partially offset by higher variable compensation and distribution expenses.

The net earnings of the company declined to $400.9 million from $533.6 million, primarily due to higher financial expenses and income tax. The comprehensive income totalled $386.4 million, down from $539.1 million. Full-year EPS was $2.46, compared to $3.03 in 2023.

“This past year has been a testament to the collective strength and dedication of our global team, the loyalty of our customers, and the ongoing support and trust of our shareholders. Reflecting on our full-year performance, our success has been driven by our unwavering focus on executing our Gildan Sustainable Growth (GSG) strategy. By reinforcing our core competencies as a low-cost, large-scale, vertically integrated sustainable manufacturer, we continued to enhance competitive advantage, and we are well positioned for continued growth in the years ahead,” said Glenn J Chamandy, president and chief-executive officer (CEO) at Gildan.

Fourth quarter (Q4) 2024 financial

The company’s fourth quarter net sales recorded $822 million, up 5 per cent YoY. The company’s Q4 operating margin was 21.8 per cent, adjusted operating margin was 21.3 per cent. Fourth quarter GAAP diluted EPS of $0.86 and record fourth quarter adjusted diluted EPS of $0.83.

The capital returned to shareholders of $246 million in Q4 and $889 million for the full year, through dividends and share repurchases. The company announces 10 per cent dividend increase for 2025.

Outlook

For 2025, Gildan Activewear expects mid-single-digit revenue growth for the full year, with an approximate 50 basis-point increase in adjusted operating margin. Capital expenditure is projected to be around 5 per cent of sales, while adjusted diluted EPS is forecasted to range between $3.38 and $3.58, reflecting a 13 to 19 per cent increase YoY.

Free cash flow is expected to exceed $450 million. The outlook is based on continued growth in key product categories, driven by recent innovations, market share gains, new programme launches, and improving conditions in certain markets that remained soft in 2024. The company also anticipates benefits from the jobs credit programme introduced in Barbados.

Following the implementation of the Global Minimum Tax in Canada and Barbados, the effective tax rate for 2025 is expected to remain similar to 2024 levels. Additionally, Gildan plans to continue share repurchases under its NCIB programme, supported by a strong balance sheet and leverage framework target of 1.5x to 2.5x net debt to adjusted EBITDA.

For the first quarter (Q1) of fiscal FY25, net sales are expected to grow in the low single digits year-over-year, or mid-single digits when excluding the impact of the Under Armour sock license agreement. Adjusted operating margin is projected to align with full-year guidance, rising by approximately 50 basis points.

The company notes that the Global Minimum Tax was enacted in Canada and Barbados in Q2 FY24, meaning the adjusted effective income tax rate in Q1 FY25 will be significantly higher than the 3.6 per cent recorded in Q1 FY24.

ALCHEMPro News Desk (SG)