NEW YORK — Gildan Activewear Inc. delivered a one-two punch on Wednesday, announcing record third-quarter earnings as well as the departure of its top executive, H. Greg Chamandy.
The Montreal-based T-shirt and knitwear manufacturer said Chamandy, the co-founder, co-chief executive officer and board chairman, was departing immediately. There were no details in the company statement, which said he was leaving to “pursue other business interests.”
Chamandy’s brother, co-founder Glenn Chamandy, the president and chief operating officer since 1994, is taking over as ceo. He did not elaborate on the shakeup during a conference call with analysts to discuss earnings results.
“I'm committed both financially and personally,” Glenn Chamandy said during the call. “I have not sold any of my shares and remain 100 percent invested.”
The analysts did not question him about the management switch, focusing instead on the firm’s rising sales and earnings.
For the three months ended July 4, Gildan Activewear reported a 20.1 percent jump in earnings to $26.2 million, or 88 cents a diluted share, exceeding Wall Street’s consensus estimate of 82 cents. The company reported earnings of $21.8 million, or 73 cents, a year ago. Sales fueled results, rising 17.5 percent to $168.4 million from $143.4 million.
Chief financial officer Laurence Sellyn said rising sales were attributable to better than expected output at the company’s production facility in Rio Nance, Honduras.
“Rio Nance accounted for approximately 60 percent of overall production in the third quarter this year, versus approximately 35 percent in the third quarter a year ago,” he said during the call.
Management’s plans for growth hinge on expanding offshore manufacturing operations such as the one in Honduras.
In a statement, Glenn Chamandy described the expansion of the company’s facilities in Honduras, the Dominican Republic and Nicaragua as “key elements” to planned growth.
So far the strategy is paying off. For the nine months to date, the company reported earnings increased 11.6 percent to $43.4 million, or $1.46 a share, compared with $38.9 million, or $1.31, in the same period a year ago.
Sales rose 20.4 percent to $387.8 million from $322 million.Robert Baylis, an independent director with the company since 1999, will assume the role of chairman. Baylis will be the company’s first independent chairman.