Gildan Activewear Q4 Beat Expectations, Dividend Raises 10%

Gildan Activewear (TSE: GIL) (NYSE: GIL) beat expectations in the fourth quarter. The maker of T-shirts, underwear and socks increased its quarterly dividend.

Sales & Profit

Net sales came in at $784.3 million in Q4 2021, compared to $690.2 million in Q4 2020.

Profit was $173.9 million ($0.89 per diluted share) for the quarter, up from $67.4 million ($0.34 per diluted share) a year earlier.

On an adjusted basis, Gildan earned $0.76 per diluted share, up 69% from adjusted earnings of $0.45 per diluted share a year earlier.

Analysts on average had expected adjusted earnings of $0.60 a share and $735.6 million in revenue.

The Montreal-based company says it will now pay a quarterly dividend of $0.169 per share, up 10% from $0.154.

CEO Commentary

Gildan president and CEO said, “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 ExpansionInnovation and ESG. 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.”

Wall Street’s Take

On February 4, RBC Capital analyst Sabahat Khan kept a Buy rating on Gil and raised the price target to $48 (C$61.20). This implies 24.8% upside potential.

The rest of the Street is bullish on GIL with a Strong Buy consensus rating based on three Buys. The average Gildan Activewear price target of C$59.74 implies 21.8% upside potential to current levels.

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