NEW YORK — Surging sales allowed Gildan Activewear Inc. to easily eclipse analysts’ expectations in the fourth quarter.

For the three months ended Sept. 29, the Montreal-based T-shirt and knitwear manufacturer reported net income of $12.5 million, or 43 cents a diluted share. That compares with last year when the company sustained a net loss of $24.9 million, or 87 cents. Earnings per share overran Wall Street’s forecast by 3 cents.

Last year’s quarterly loss stemmed primarily from $29.1 million in after-tax special charges and adjustments.

Sales for the period bound up 38.8 percent to $102.4 million from $73.8 million a year ago. Figures have been converted from Canadian dollars at current exchange rates.

"We are pleased to have delivered on all of our key performance targets in fiscal 2002," said chief executive officer H. Greg Chamandy in a statement. "We have exceeded our market share and sales growth goals, we have achieved in excess of 30 percent growth in earnings per share, we have continued to lower our cost structure, and we have become a significant free-cash flow generator, while still maintaining a strong growth profile."

Gildan said the higher sales reflected a 26.8 percent increase in unit shipments, combined with a higher value product mix as compared with last year when lower-value T-shirts were in high demand following the events of Sept. 11. Additionally, Gildan benefited from a higher proportion of golf shirts and fleece in its sales mix as compared with the prior-year quarter.

Greater efficiency accruing to the bottom line was evidenced by a 390-basis-point improvement in gross margin to 28.1 percent from 24.2 percent last year.

Overall, for the full fiscal year, last year’s special charges of $31.7 million after-tax allowed Gildan to record an eye-popping 8,048.5 percent increase in net earnings to $42.5 million, or $1.45. Last year, the company had charge-depleted profits of $522,400, or 2 cents.

Sales for the year leapt 19 percent to $384.5 million from $323.2 million.

Looking ahead, the company reiterated its guidance for full-year EPS of $1.66 to $1.73.

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