Gildan Activewear’s (asi/56842) sales in the second quarter declined, but the leading apparel manufacturer says a new acquisition should help bolster revenue growth. For the three month period ended July 3, Gildan’s net sales reached $689 million, a drop of 3.5% from the same quarter last year.
Earnings decreased too, falling 6% from $102.6 million ($0.42 per share) in Q2 2015 to $96.4 million ($0.41 per share) in this year’s second quarter. A 1.4% slip in revenue in Gildan’s printwear segment along with a 7.9% drop in its branded apparel division were central reasons for the results. The company attributed the declines to exiting certain retailer private label programs, lower prices, inventory destocking and the impact of the strong U.S. dollar abroad.
Gildan also announced Wednesday, July 27 that it has signed an agreement to purchase Montreal-based Peds Legwear Inc. for $55 million. Expected to close by the end of August, the acquisition should “create revenue growth opportunities by leveraging Gildan’s existing customer relationships to broaden the channels of distribution for the Peds and MediPeds brands and by extending these brands into Gildan’s other product categories,” according to a company statement.
Back in May, Gildan purchased Alstyle Apparel (asi/34817) for $110 million. Taking into account the acquisitions and other factors, Gildan is now projecting that its consolidated net sales for the year will be $2.65 billion. That’s up from a prior projection that put the total at about $2.6 billion.