(Filed Under Financial and General Interest News). Gildan Activewear second quarter sales rose 3.8% while net income jumped 13.7%. The company earned $107.7 million on sales of $715.4 million in the three months ended July 2, 2017 compared to net income of $94.7 million on sales of $688.9 million during the same period in 2016.
“Sales reflected the impact of contributions from acquisitions, which came in as expected, with progress on integration activities well on plan. Branded Apparel benefited from strong growth in men’s underwear and Printwear benefited from continued momentum in fashion basics and international markets. Operating margins in the quarter increased by 200 basis points compared to the same quarter last year, driving adjusted earnings per share growth of approximately 20% in the quarter.”
The company stated “Net sales for the Branded Apparel segment in the quarter were $235.3 million, up 8.1% from $217.6 million in the second quarter of 2016 driven primarily by the approximate $17 million sales contribution of the Peds acquisition and strong growth in men’s underwear, partly offset by lower global lifestyle and Gold Toe branded sock sales reflecting weakness in department stores and national chains.”
“For the three months ended July 2, 2017, Branded Apparel generated strong operating income of $26.0 million, up 52.0% compared to $17.1 million in the same quarter last year. Branded Apparel operating margins of 11.0% increased 320 basis points over the same quarter last year. The significant improvement in operating margins was primarily attributable to the favorable impact of manufacturing and raw material costs compared to the prior year quarter, and lower SG&A expenses as a percentage of Branded Apparel sales, partly offset by unfavorable product-mix.”
The company also explained that “Printwear net sales for the second quarter of 2017 were $480.1 million, up 1.9% over the same period last year. The incremental sales contribution of approximately $29 million from acquisitions combined with strong double-digit organic unit sales increases in fashion basics, higher net selling prices and increased shipments in international markets were partly offset by lower unit sales volumes of fleece in the quarter and the impact of unfavorable foreign exchange.”
“Printwear segment operating income for the three months ended July 2, 2017 totaled $122.1 million, up 10.0% compared to $111.0 million for the same period last year. Operating margins for Printwear were 25.4%, up 190 basis points over the prior year quarter due primarily to the favorable net impact of net selling prices and manufacturing and raw material costs, partly offset by unfavorable foreign exchange impacts and SG&A expenses from acquisitions.”
Gildan produces “branded basic family apparel, including T-shirts, fleece, sport shirts, underwear, socks, hosiery, and shapewear,” according to a description it provides. Labels include company-owned brands such as Gildan, Gold Toe and Peds. The company also has the U.S. sock license for Under Armour. Gildan “owns and operates vertically-integrated, large-scale manufacturing facilities which are primarily located in Central America, the Caribbean Basin, North America, and Bangladesh”
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