Montreal-based Gildan Activewear Inc. posted fourth-quarter sales that jumped 39 percent as the company’s printwear and branded apparel business experienced double-digit growth.
Results were offset by lackluster fleece sales due to warmer temperatures in the fourth quarter as well as an overall weak holiday shopping season.
Sales for the quarter climbed to $543.8 million from $390.6 million in the same period last year. Adjusted net earnings, which carves out acquisition and restructuring costs, came in at $68.9 million, or 28 cents a share, which compares to a loss of $37.6 million, or 15 cents, in the prior year. Sales for the year-end period rose 11.7 percent to $2.57 billion from $2.3 billion in the prior year while adjusted net earnings rose 26.4 percent to $355.4 million, or $1.46 per share, from $281.1 million, or $1.12 a share.
Profits were in-line with what analysts polled by S&P Capital IQ expected.
Gross margins during the quarter rose to 26.63 percent of sales from 10.96 percent in the prior year. Printwear sales jumped 77.7 percent while branded apparel sales gained 12.4 percent during the quarter.
By way of outlook, the company said fiscal 2016 adjusted earnings are expected to be between $1.50 and $1.60 a share on projected consolidated net sales of over $2.6 billion.
Regarding fourth-quarter results, the company said the 39 percent “sales growth included the benefit of the non-recurrence of a $48 million distributor inventory devaluation discount, which negatively impacted printwear sales in the fourth quarter of calendar 2014. Excluding the distributor inventory devaluation discount in the prior year quarter, consolidated net sales in the quarter were up 24 percent.”
The company said net sales in the quarter “were higher than the company’s guidance of consolidated net sales in excess of $500 million mainly due to higher-than-anticipated printwear unit sales volumes in T-shirts.”
The company also noted that the “higher-than-anticipated printwear sales was offset by product mix, mainly due to a lower proportion of fleece sales, and a weak holiday season in retail which particularly impacted the sales of higher-valued retail products in national chains, department stores and sports specialty channels.”