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Growth in Sales, Cost Reductions Raise Gildan Net

NEW YORK — Sales growth and costs controls boosted Gildan Activewear Inc.’s bottom line in the third quarter.<br><br>For the three months ended July 6, the Montreal-based T-shirt and knitwear manufacturer said net income gained 12.7...

NEW YORK — Sales growth and costs controls boosted Gildan Activewear Inc.’s bottom line in the third quarter.

For the three months ended July 6, the Montreal-based T-shirt and knitwear manufacturer said net income gained 12.7 percent to $22.4 million, or 75 cents a diluted share, from $19.9 million, or 67 cents, a year ago, as sales increased 4.3 percent to $146.5 million from $140.5 million last year.

Dollar figures have been converted from the Canadian dollar at current exchange. The firm reported net income of 31.3 million Canadian dollars and sales of 204 million Canadian dollars.

Gildan achieved greater unit sales, better gross margins and lower selling, general and administrative costs, but those were largely offset by decreased selling prices and a weaker U.S. dollar, the company said.

Still, gross margin did expand 100 basis points to 30.7 percent of sales, and SG&A contracted 77 basis points to 9.2 percent.

“We have been able to fully offset the significant impact of the U.S. currency decline by surpassing our targets for manufacturing efficiencies and by exceeding our unit sales growth forecast, in spite of low inventories and capacity constraints,” said chief executive officer H. Greg Chamandy in a statement. “We continue to be excited about the progress and potential of our Rio Nance integrated textile facility, which will provide additional production capacity, as well as allow us to significantly further drive down our cost structure.”

Overall, for the first nine months, Gildan reported a 22.6 percent increase in net income to $41.3 million, or $1.39. By comparison, last year the company had profits of $33.7 million, or $1.15. Sales for the period rose 8.8 percent to $344.2 million from $316.5 million a year ago.