Despite the increased emphasis on home fitness in recent weeks, sales of activewear are actually down at some firms.
For the three-month period ending March 29, the company’s revenues fell 26 percent to $459 million, down from $623 million the same time last year. The company also took a hit on profits — with a loss of $99 million — compared with a $22 million gain last year.
“During the first quarter, we faced unprecedented impacts globally as the COVID-19 pandemic unfolded,” Glenn Chamandy, president and chief executive officer of Gildan, said in his prepared remarks. “This required us to amplify our focus on what we do best and on what we can do to support all our stakeholders as a values-driven, strong, resilient and well-positioned company.”
While most retailers in North America and Europe are expected to take a loss during the first quarter because of the coronavirus and subsequent store closures, Gildan said the effects of the coronavirus were most evident in its activewear and printable apparel categories. The latter is most often used for sporting events, promotional apparel and other large-scale gatherings, many of which were postponed or canceled in March as the virus began to spread across North America.
Meanwhile, sales of hosiery fell more than 33 percent to $86.5 million, while activewear fell 24.5 percent during the quarter to $372 million. That’s because most consumers, Chamandy said on Wednesday evening’s conference call with analysts, tend to shop for activewear in person.
And it wasn’t just Gildan that felt the loss. U.S. sales of activewear dropped in the mid-teen percentage during the first quarter, compared to a year earlier, according to The NPD Group.
Gildan’s sock business also had increased declines, a trend that has become evident in the last few years as novelty socks gain market share.
“Even before this [pandemic], our sock business was plateauing,” Chamandy said. “That’s what we guided to in the beginning of the year.”
Either way, he said the company plans to continue its focus on socks, underwear and activewear in the future.
Shares of Gildan Activewear, which are down 56 percent year-over-year, fell nearly 4 percent during after-hours trading Wednesday.
So far this quarter, Chamandy said, “April has been very, very negative.” He added that he expects further declines in profits and shipping throughout the quarter.
To help curb losses, Gildan has announced executive pay cuts, suspended dividends, eliminated discretionary spending and drew down on its revolving credit facility.
Currently, the company has limited manufacturing activity. The facilities that remain open are producing non-medical face masks and isolation gowns.
“We don’t know how long the ramp up [back up] will take,” Chamandy said. “We’re making sure we’re prepared. I would say we’re very comfortable with how things stand today.”