Gildan Activewear Inc T.GIL

Alternate Symbol(s): GIL

Consumer Cyclical Luxury Goods

Gildan Activewear Inc. is a vertically integrated manufacturer of everyday basic apparel, including activewear, underwear, and hosiery products. Its primary product categories include activewear tops and bottoms (activewear), socks (hosiery), and underwear tops and bottoms (underwear). Its activewear product lines include T-shirts, fleece tops and bottoms, and sports shirts. Its hosiery product lines include athletic, dress, casual and workwear socks, liner socks and socks for therapeutic purposes. Its underwear product lines include men's and boy's underwear (tops and bottoms) and ladies’ panties. It markets its products in North America, Europe, Asia Pacific, and Latin America, under a diversified portfolio of Company-owned brands, including Gildan, American Apparel, Comfort Colors, GOLDTOE and Peds. It also sells socks under the Under Armour brand in the United States and Canada. It has manufacturing facilities in Central America, the Caribbean, North America, and Bangladesh.

TSX:GIL - Post by User

Gildan Activewear Inc

<< Previous

Bullboard Posts

Next >>

Post by retiredcfon Aug 04, 2022 12:49pm

90 Views

Post# 34871447

RBC

August 4, 2022

Gildan Activewear Inc.
Q2 Sales and EPS ahead of RBC/consensus forecasts

NYSE: GIL | USD 29.49 | Outperform | Price Target USD 52.00

Sentiment: Positive

First impression: Gildan reported Q2 Sales and EPS ahead of RBC and consensus expectations. Q2 Sales of $895.6MM were ahead of RBC/consensus forecasts of $784.4MM/$820.1MM and reflected better-than-expected contribution from the Activewear segment partially offset by a lower-than-expected contribution from the Hosiery & Underwear segment. Adjusted Diluted EPS of $0.86 was ahead of RBC/consensus expectations of $0.70/$0.77. Relative to our forecasts, better-than-expected Sales and SG&A as a % of Sales, partially offset by modestly lower-than-expected Gross Margin %, drove Adjusted EPS ahead of our forecasts.

Renewal of NCIB: Gildan repurchased 3.6MM shares in Q2 and the company's board approved the implementation of a new NCIB to repurchase 5% of the company's issued/outstanding shares (existing NCIB expires soon in early August).

Calling out some softness in the market; overall outlook remains supportive for H2 and reiterated 3-year targets: Despite seeing some "slowing", Gildan believes a recovery in events/travel/tourism remains a demand tailwind for H2/22. Additionally, despite a "softening retail environment", the company noted this will primarily impact its national account customer sales which represents a smaller part of the overall business. On this basis, Gildan reiterated its three-year targets (i.e., Net Sales CAGR of 7%-10%, an Adjusted Operating margin of 18%-20%, and a RONA of >20%).

Q2 2022 results details (see Exhibit 1 for full results details):

• Consolidated Sales: $895.6MM (+19.9% YoY) vs. RBC/consensus forecasts of $784.4MM/$820.1MM Activewear: $757.8MM (+26.9% YoY) vs. RBC forecast of $632.9MM
Hosiery & Underwear: $151.5MM (-8.2% YoY) vs. RBC forecast of $151.5MM

• Adjusted EPS: $0.86 vs. RBC/consensus at $0.70/$0.77