Gildan Activewear (asi/56842) reported that its net sales reached $715 million for the third quarter of 2016, up 6% from the same quarter last year. The leading apparel manufacturer said its printwear sales totaled $462 million and were up 5% compared to the same period in 2015, while its branded apparel sales grew 8.2% for a total of $253 million.
“We delivered printwear sales in line with the expectations we had set for the quarter,” Glenn Chamandy, Gildan Activewear president and CEO, said in an earnings call. “The branded apparel business turned in a solid performance with high single-digit growth amid a tough retail environment. We’re making good progress with the integration plans for our most recent acquisitions of Alstyle [Apparel] and Peds, and finally, we’re very pleased with the strong free cash flow generation in the third quarter.”
Gildan attributed the printwear segment’s growth to a $39 million sales contribution from its acquisition of Alstyle Apparel (asi/34817) in May, continued growth in the performance and fashion basics segments in the U.S. and sales volume growth of 15% in international printwear markets. Alstyle’s contribution made up for the negative effects of lower selling prices, less stocking of inventory from buyers and unfavorable currency exchange rates.
The company attributed its branded apparel segment’s growth to increased shelf space, new retail programs and a contribution of $10 million from the acquisition of Peds Legwear Inc. in August. Gildan branded underwear reached double-digit sell-through and revenue growth during the quarter.
During the earnings call, Chamandy announced that the company will be offering new products as 2017 approaches. “We’re coming out with a whole line of performance fleece,” Chamandy said. “We’re revamping our performance polos and adding new products and adding new styles in performance T-shirts, as well as significantly expanding our fashion basics segment in terms of the product offering.”
Gildan changed its full-year guidance to reflect year-to-date performance and expectations for the fourth quarter. Fully reported earnings on a per-share basis have dropped to a range of $1.48-$1.50 from a previous estimate of $1.50-$1.55 and EBITDA has adjusted to $530 million-$535 million, compared with $545 million-$555 million previously. Consolidated sales for the year are now projected to be $2.6 billion compared to the previous forecast of $2.65 billion.
Printwear sales guidance of $1.65 billion remains unchanged while branded apparel sales for the year are now projected to be $960 million compared to the previous estimate of $1 billion.