Gildan revenue climbs in Q3, rises 2017 guidance
Gildan Activewear Inc. reported modest third quarter results on Thursday, which included strong sales from its printwear segment, offsetting low sales from its branded apparel segment.
The Montreal-based apparel manufacturer reported net sales of $716.4 million in the third quarter ended October 1, 2017, a year-over-year increase of about 0.2 percent.
Net sales for the printwear segment for the third quarter of 2017 amounted to $480.7 million, up $18.8 million, or 4.1 percent over the same period last year. The increase reflected a sales contribution of $15.4 million from the acquisition of American Apparel. The sales contribution along with strong growth in fashion and performance basics, made up for lower sales of basics.
Meanwhile, net sales for the branded apparel segment fell 6.9 percent compared to the third quarter of 2016, to $235.7 million. The fall was mainly due to a weakness in the sock category, as well as the sporting goods channel.
Net earnings totaled $118.6 million, or $0.53 per share, up from $116.4 million, or $0.50 per share on a diluted basis in the same quarter last year.
As a result of strong third quarter earnings and more tempered sales expectations for branded apparel in the current retail environment, the company raised its guidance for the full year.
For 2017, Gildan is now projecting full-year earnings in the range of $1.70 to $1.72. The Company also updated its expectation for adjusted EBITDA for 2017 and now expects it to be in the range of $580 to $590 million. Finally, the company is now projecting free cash flow in excess of $450 million for the year, compared to its previous estimate of in excess of $425 million.
However, Gildan somewhat lowered its fiscal 2017 guidance for branded and printed apparel sales. The company continues to expect strong full year printwear net sales growth in the high single digit range, while it is now projecting branded apparel net sales growth in the low single digit range versus its previous projection of high single digit growth.
Gildan also announced that it has received approval from the Toronto Stock Exchange to raise the maximum number of shares to repurchase from 11.5 million to 16.1 million.
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