(Filed Under Financial and General Interest News). Driven by strong sales in the activewear and underwear categories, Gildan Activewear Inc. cited a 50.3 percent increase in sales during the first quarter ended January 2, 2011: to $331.3 million from $220.4 million during last year’s first quarter. Net earnings were $35.9 million, or 29 cents per diluted share.
The Canadian manufacturer reported that activewear and underwear sales jumped 76.7 percent; to $270 million, off-setting sock sales, which declined 9.3 percent, to $61.2 million. The growth in activewear and underwear was boosted by 7.9 percent growth in the U.S. distributor channel, strong growth in international and screen print markets and a greater volume of shipments to mass-market retailers.
The company said it achieved positive net sales despite higher cotton costs and start-up inefficiencies in its manufacturing and distribution. Start-up inefficiencies from the company’s new retail distribution center in Charleston, S.C. continued to negatively impact Gildan’s ability to service sales demand for socks during the 2010 holiday season and increased distribution expenses during the quarter.
Despite these robust sales during the first quarter, Gildan’s projections for the second quarter were relatively modest. The company expects net sales to increase by approximately 15 percent over last year’s second quarter: to $375 million. The company based these projections on expected cotton cost increases and lower than previously projected unit sales volumes and reduced manufacturing and distribution efficiencies.
Quebec-based Gildan is a vertically integrated marketer and manufacturer of basic apparel with a presence in Canada, the United States, Europe, Mexico and the Asia-Pacific region.
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