NEW YORK -- With sales and gross margins both moving ahead, Gildan Activewear registered a 60 percent increase in fourth-quarter earnings.
Additionally, the firm announced plans to expand its manufacturing capacity.
Net income for the fourth quarter jumped 62.9 percent to $11 million, or 75 cents a diluted share. This compares to $6.8 million, or 47 cents, during the year-ago quarter.
The increased earnings resulted from higher sales combined with increased gross margins, according to the company. Gross margins were 28.9 percent compared to 26.5 percent in the 1999 fourth quarter.
The Montreal-based company's sales for the period ended Oct. 1 rose 26.1 percent to $81.1 million against $64.3 million a year ago. All dollar amounts were converted from the Canadian dollar at current exchange rates.
The company said the increased sales were driven by continuing market share penetration in Canada and the U.S. in both 100 percent cotton T-shirts and the newer product lines, including polyester-blend crewnecks, fleece pants and hooded sweatshirts.
The manufacturing and distribution plan takes advantage of the changes effected by The Trade Enhancement Act of 2000 (formerly referred to as the CBI Enhancement Act). Designed to balance the trade interests of Central American and Caribbean Basin countries with those of Mexico, which benefits from NAFTA, the legislation eliminates U.S. duty on goods sewn in these countries and made from fabric wholly formed in the U.S. from American-made yarn.
The company has set up facilities in Eden, N.C., and expanded its operations in Honduras as follows:
In October the company leased a facility, at what it called "very favorable terms," and is installing equipment to ramp up production in 2001.
Gildan entered into a long-term supply agreement with a major U.S. yarn manufacturer, also located in North Carolina but not identified, to purchase cotton yarn spun in the U.S. According to the company, the deal secures for Gildan fixed conversion costs for approximately 60 percent of its cotton yarn requirements with no significant capital investment expenditure.
Products knit in North Carolina will be bleached, dyed, finished and cut in a facility currently under construction in Honduras and expected to be completed next year. The facility, which is located within Gildan's Central American regional manufacturing hub, will allow the company to leverage its existing manufacturing infrastructure.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"