Gildan Activewear sees FY23 EPS in line with FY22

The company said, "A year ago, we provided an overview of Gildan’s Sustainable Growth strategy focused on capacity driven growth, innovation and ESG. Our strong results are a testament to the progress we have made on this strategy. Specifically, with our FY22 revenue base of $3.240B, adjusted operating income of $639M and adjusted operating margin of 19.7% coming in at the higher end of our annual target range of 18% to 20%, our business model is positioning us well to deliver on our long-term profitability and return targets. Our leadership in pricing, product availability and sustainability, combined with our increased manufacturing flexibility is enabling us to grow our market share in key product categories. Further, we are well positioned to continue benefiting from favourable industry trends that are playing out such as the casualization of apparel, the interest for private label products, the impact of the creator economy and ongoing developments in digital printing, as well as the appeal of nearshoring and sustainable practices, all of which are creating long-term growth opportunities for Gildan given our competitive advantages. Notwithstanding these strong fundamentals, in the first part of 2023 we expect continued headwinds tied to the demand environment and to strong comparative periods, particularly as we cycle post pandemic inventory replenishment in the first quarter. We also expect increased margin pressure in early 2023 as we work through higher raw material and input costs currently in our inventories. However, as we move past the first quarter, we expect these headwinds to abate, enabling us to resume our growth trajectory and our path towards delivering on our performance targets. Accordingly, for 2023 we expect the following: Revenue growth for the full year to be in the low single digit range; Full year adjusted operating margin to fall within our 18% to 20% annual target range, despite expected margin pressure in the Q1 driving us 200 to 300 basis points below the low end of our target range; Capex to come in at the lower end of our previously stated 6% to 8% range; Strong free cash flow generation as significant investments in our inventories, which have put us in a strong position to service our customers, are now mostly behind us; Adjusted diluted EPS in line with 2022, which assumes the continuation of share repurchases aligned with our capital allocation targets of purchasing approximately 5% of the outstanding public float in 2023."