Gildan Activewear ( (GIL) ) has released its Q1 earnings. Here is a breakdown of the information Gildan Activewear presented to its investors.
Gildan Activewear Inc., a prominent player in the apparel industry, specializes in manufacturing everyday basic apparel such as activewear, underwear, and socks, catering to a diverse clientele including wholesale distributors, screenprinters, retailers, and global lifestyle brands. The company operates with a vertically integrated business model, with manufacturing facilities located in Central America, the Caribbean, North America, and Bangladesh, and is committed to strong ESG practices.
In its first quarter of 2025, Gildan Activewear reported net sales of $712 million, marking a 2.3% increase compared to the previous year. The company maintained its full-year guidance despite a challenging macroeconomic environment, driven by its Gildan Sustainable Growth strategy. The activewear segment saw a robust 9% sales growth, while international sales faced a slight decline. The company returned $62 million to shareholders through share repurchases.
Key financial highlights include an operating margin of 18.2% and an adjusted operating margin of 19.0%. The gross profit improved to $222 million, primarily due to lower raw material costs. However, the hosiery and underwear segment experienced a significant decline in sales, attributed to the phase-out of the Under Armour business and market softness. Despite higher borrowing levels, the company managed to maintain a solid financial position with a net debt leverage ratio of 2.2.
Looking ahead, Gildan remains confident in achieving its 2025 objectives, with expectations of mid-single-digit revenue growth and an adjusted operating margin increase of approximately 50 basis points. The company plans to continue its focus on innovation, capacity expansion, and ESG initiatives, leveraging its strong industry positioning and flexible business model to navigate the evolving economic landscape.