MONTREAL — Gildan Activewear continues to increase its market share as it plots its way to becoming a $650 million company from its current $400 million within the next two years, chief executive officer Greg Chamandy said at the company’s annual meeting here last week.
The vertically integrated T-shirt and knit shirt manufacturer has also added capacity by acquiring a local yarn-spinning plant from a former rival that went bankrupt.
Gildan invested a total of $13.2 million for the plant and to add new equipment. All figures have been converted from Canadian dollars at current exchange rates.
The 180,000-square-foot facility employs 150 workers and can produce 70,000 yarn cones a week, enough to make more than 1 million T-shirts.
Using air-jet technology, the local plant, along with Gildan’s Long Sault, Ontario, yarn-spinning facility, will enable the company to fulfill close to 100 percent of its cotton and polyester yarn requirements for North American production.
Chamandy said Gildan expects to ship 25 million dozen T-shirts, fleece and sport shirts this year, up from 23 million last year, from plants in Canada, Mexico and Honduras, with 85 percent destined for the American market.
To reach its new sales objective, Gildan plans to boost T-shirt sales by $115 million, sports shirts and fleece by $65 million and private label-screenprinter direct sales by $85 million, shareholders were told.
Sales to Europe are also expected to top $65 million within the next 24 months from nothing since Gildan began shipping to the continent in 2000.
“We’ll have the capacity in Canada and the Caribbean area to handle the higher demand when our new Honduras plant reaches 100 percent capacity by yearend,” Chamandy said following the annual meeting. The plant, inaugurated in September, has an annual production capacity of 15 million units.
Gildan doubled its net earnings in its first quarter ended Dec. 29 to $3.8 million, or 13 cents a share, from $1.8 million, or 7 cents, in the year-ago quarter. Sales rose 15 percent to $67.2 million from $58 million.
Chamandy said Gildan’s share of the North American T-shirt market reached 31.4 percent during the quarter compared with 28 percent in the previous quarter and 24.9 percent a year ago.
He said U.S. inventories were down 12.6 percent compared with the year-ago quarter due to a 35 percent increase in demand.
Based on the current quarter and the outlook for the rest of the year, Gildan now expects to earn between $1.77 and $1.84 a share for the full fiscal year, versus an earlier forecast of $1.70 and $1.77.