Gildan Activewear Inc. (GIL,GIL.TO) on Wednesday reported higher earnings in the third quarter, driven by sales growth, higher selling prices, and improved sales volume. On an adjusted basis, earnings declined from last year, yet beat analysts' forecast by a penny. Going forward, the supplier of activewear confirmed the earnings outlook for fiscal 2008.
For the third quarter, the Montreal, Canada-based company's net earnings, including special items, were US$54.01 million, or US$0.44 per share, compared to US$52.4 million, or US$0.43 per share, last year. For the second quarter, net earnings were US$41.7 million or US$0.34 per share
Third quarter results included US$2.3 million, or US$0.02 per share, of restructuring charges, related to ongoing carrying costs pursuant to the closure of Canadian and U.S. manufacturing facilities, and a planned consolidation of sewing operations in Haiti. Included in the year-ago quarter results were US$4.6 million, or US$0.04 per share, of restructuring charges related to manufacturing closures.
Excluding special items, earnings declined to US$56.3 million, or US$0.46 per share, from US$57 million, or US$0.47 per share, in the year-ago quarter. Analysts expected earnings of US$0.45 per share for the quarter.
According to the company, the change in adjusted earnings per share was primarily due to higher activewear selling prices and unit sales volumes, more than offset by higher cotton and energy costs, more unfavourable activewear product-mix, higher selling, general and administrative and depreciation expenses, the non-recurrence of a prior-year income tax recovery, a provision for a doubtful receivable account, and charges to write off or dispose of surplus fixed assets.
Also, the third quarter of fiscal 2008 benefited from one additional week as it comprised 14 weeks instead of the normal 13 weeks for a fiscal quarter.
Gildan's quarterly sales increased 30.6% to US$380.77 million from US$291.61 million last year. Analysts were looking for revenues of $355.60 million for the quarter. For the sequentially preceding quarter, sales were $293.8 million.
The company attributed the sales growth to an increase in sock sales due to the acquisition of V.I. Prewett & Son in the first quarter, an approximate 6% rise in activewear unit selling prices and 10.4% growth in unit sales volumes for activewear and underwear The growth in activewear unit sales was due to the additional week of shipments and continuing market share penetration in all product categories in the U.S. wholesale distributor channel.
Gross margins declined to 31.6% from 32.4% last year, as the positive gross margin impact of higher activewear selling prices and favorable manufacturing efficiencies were more than offset by higher cotton, energy, chemicals and transportation costs, the impact of production inefficiencies in the Dominican Republic textile facility, and the impact of Prewett acquisition. Socks manufactured in the U.S. had lower gross margins than activewear and sock products manufactured in the Honduran manufacturing facilities, impacting overall gross margins, the company noted.
Among Gildan's peers, VF Corp. (VFC) in mid-July reported a 27% increase in its second-quarter profit on 11% revenue growth.
For the first nine months of fiscal 2008, net earnings totaled US$123.2 million, or US$1.01 per share, up from US$89.2 million, or US$0.73 per share, for the same period in fiscal 2007. Before the impact of restructuring and other charges, net earnings rose to US$127.1 million, or US$1.04 per share, from US$111.5 million, or US$0.92 per share, in the previous year. For the year-to-date period, sales were up 30.4% to US$924.99 million from US$709.57 million in the previous year.
Going forward, for fiscal 2008, the company continues to expect earnings per share in the range of US$1.45 to US$1.50. Analysts currently forecast earnings of $1.48 per share for full-year 2008.
The company also said that it is not yet in a position to provide earnings guidance for fiscal 2009, due to lack of visibility on certain key external factors impacting the results. Capital expenditures for fiscal 2009 are estimated to be about US$160 million, primarily for the Rio Nance IV and V capacity expansion projects.
GIL is trading at US$25.17 on the NYSE, down US$2.56, on a volume of 1.24 million shares.
On the Toronto Stock Exchange, GIL.TO dropped C$2.60, and is is trading at C$26.89, on a volume of 306,961 shares.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.