MONTREAL — Gildan Activewear Inc. will continue to expand its low-cost production facilities in the Caribbean as part of its objective to more than double sales to $1 billion by 2009, up from $533.3 million in fiscal 2004.
“We have $425 million in capital expenditures planned between now and 2009,” Glenn Chamandy, president and chief executive officer, told shareholders at the company’s annual meeting on Wednesday. “We also plan a 15 to 20 percent increase in earnings per share over the next five years.”
About 89 percent of Gildan’s production is done offshore, backed by its Rio Nance plant in Honduras that produces about 200 million garments a year. Production will ramp up gradually this year and next with the phasing in of two new textile facilities, in the Dominican Republic and Nicaragua. On the sewing side, the company is opening plants in Haiti and the Dominican Republic, Nicaragua and Honduras.
Gildan said Tuesday that it was closing two Canadian yarn-spinning plants, in Quebec and Ontario, at the end of March, affecting 285 workers and shifting production to Clarkton, N.C. The move is expected to save $4 million annually. The new U.S. plant will be leased and operated by Gildan’s yarn-spinning joint venture with Frontier Spinning Mills.
About 85 percent of Gildan’s products are sold in the U.S., where it has a 31 percent share of the T-shirt market, a 25 percent share of the sport shirts market and 19 percent of the fleece market. It plans to corner 35 percent of each of those markets by 2009, according to Chamandy.
Also on Wednesday, Gildan reported that earnings for the first quarter ended Jan. 2 surged 92 percent to $8.34 million, or 28 cents a share, from $2.9 million, or 10 cents a share last year. After adjusting last year’s results for the adoption of the U.S. dollar as the company’s functional currency, earnings were up 67.7 percent, the company said.
Sales gained 39.8 percent to $109 million. The results were partially offset by higher expenses and increased costs for cotton, energy and transportation, the company noted.