Gildan Activewear earnings up 6.1%

Gildan Activewear has reported adjusted EPS of $0.52 per share on a diluted basis for the second quarter of 2018, up 6.1 per cent from $0.49 per share on a diluted basis in the same quarter last year. The increase was mainly due to higher sales and the benefit of a lower share count compared to the prior year, partly offset by a lower operating margin.

The net sales of Canada-based company were $764.2 million in the second quarter, up 6.8 per cent compared to the prior year driven by a 17.3 per cent increase in activewear sales.

The increase in activewear was driven by strong shipments of imprintable products, as well as increased shipments to global lifestyle brand customers and retailers. International sales in the second quarter were up 35.2 per cent, reflecting strong growth momentum across all markets.

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Net sales of $1,411.5 million for the six months ended July 1, 2018 were up $30.8 million, or 2.2 per cent compared to the same period last year.

The sales increase was driven by a 10.5 per cent increase in activewear sales, partly offset by a 22.2% decline in the hosiery and underwear sales category.

For the second quarter of 2018, the company generated operating income of $121.0 million and adjusted operating income of $124.0 million, flat compared to the same period last year. 

For fiscal 2018, diluted EPS is likely to be in the range of $1.85 to $1.90 compared to its previous guidance of $1.80 to $1.90. Net sales growth is now projected to be in the mid-single-digit range, the upper end of the company's previous range of low to mid-single digit growth.

The company expects adjusted EBITDA to be in the range of $605 to $620 million compared to $595 to $620 million previously, and free cash flow for 2018 is now expected to be in excess of $425 million for the year, higher than its previous estimate of in excess of $400 million.