Higher selling prices and unit growth in the athletic business helped Gildan Activewear Inc. boost second-quarter profits, but increased cotton costs tempered the gains.
Profits for the quarter grew 25.8 percent to $61.4 million, or 50 cents a diluted share, from $48.8 million, or 40 cents, a year earlier. Adjusted profits of 53 cents came in 4 cents ahead of Wall Street expectations.
Sales for the quarter ended April 3 climbed 17.3 percent to $383.2 million from $326.8 million.
“The growth in net earnings compared to last year was primarily due to higher net selling prices for activewear and growth in activewear unit sales volumes, as well as the impact of more favorable income taxes,” the Montreal-based firm said.
Offsetting the gains were higher cotton costs, lower sock sales, the transition to new manufacturing and distribution facilities and a $3.7 million loss on disposal of a corporate aircraft.
Gildan said adjusted annual profits would range from $2 to $2.10 a share, where analysts were looking for $2.02 on average.