Gildan Activewear, Inc. President and CEO Vince Tyra unveiled his key focus strategic priorities on April 15 during a late afternoon conference call with analysts. Concurrently, Gildan also reconfirmed its 2024 full-year guidance and announced preliminary Q1 revenue.

“I’m excited to be leading Gildan at this pivotal time,” Tyra said on the call. “Having completed 90 days at the helm of Gildan, I wanted to share with you my key focus strategic priorities and articulate how we can leverage our strengths and accelerate value creation for all stakeholders. Importantly, these priorities reflect feedback received from shareholders and their desire for us to continue sustainably growing Gildan. 

“As we continue to execute on the key components of the Gildan Sustainable Growth strategy, my first few months as CEO have confirmed my belief that Gildan’s core fundamentals are strong and that we are in a great position to unlock further potential and launch the next phase of our growth. My management team and I will continue to review the business and we look forward to presenting a fuller view at an Investor Day this Fall.”

Gildan said in a release that the Gildan Sustainable Growth (GSG) strategy, with its three key pillars of Growth, Innovation and ESG, has set the foundation for the company’s future. The company continued that Tyra is capitalizing on this strong foundation and the execution of the GSG plan, which remains core to Gildan’s business, as he outlined his key focus strategic priorities to “unlock further growth potential while amplifying the company’s commercial capabilities.”

The five key priorities are:

  • Successfully execute supply chain initiatives to maintain availability, cost leadership and industry-leading margins;
  • Leverage Gildan’s brands and develop distinct commercial capabilities to accelerate growth and strengthen its market position;
  • Deepen Gildan’s relationships with existing and prospective retail partners, strengthening its position as the supplier of choice;
  • Complement Gildan’s strong North American market position with a renewed focus on select international markets to drive growth, and
  • Empower and build world-class talent and leadership to ensure long term resilience of its business.

Medium-Term Targets
Assuming no deterioration in the current macroeconomic environment, Gildan noted it is “confident that the targeted priorities will position the company to continue to drive market share gains in key product categories, unlock further opportunities in targeted markets and deliver on key financial metrics over the 2025/28 period,” reflecting the following:

  • Net sales growth at a compound annual growth rate in the mid-single-digits range;
  • Annual adjusted operating margin in the range of 18 percent to 21 percent;
  • Capital expenditures (CapEx), as a percentage of sales, of about 5 percent per year, on average, to support long-term growth and vertical integration; and
  • Adjusted diluted EPS growth per annum in the high-single to low-double-digit range.

Gildan expects to maintain its capital allocation priorities which, beyond planned CapEx deployment, focus on annual dividend growth, continued share repurchases now in line with a leverage framework of 1.5x to 2x, and value accretive M&A. The combination of the above is expected to drive strong shareholder returns.

2024 Outlook and Preliminary Q1 2024 Revenue
Gildan reconfirmed its 2024 full-year guidance, announced on February 21, 2024 in its Q4 2023 press release, as well as the assumptions underpinning this guidance:

  • Revenue growth for the full year to be flat to up low-single-digits;
  • Adjusted operating margin slightly above the high-end of the 18 percent to 20 percent annual target range. Compared to fiscal 2023 adjusted operating margin of 17.3 percen, the fiscal 2023 operating margin was 20.1 percent;
  • CapEx to come in at approximately 5 percent of sales;
  • Adjusted diluted EPS in the range of $2.92 to $3.07, up between 13.5 percent and 19.5 percent year-over-year. Compared to 2023 adjusted diluted EPS of $2.57, the fiscal 2023 GAAP diluted EPS was $3.03;
  • Free cash flow above 2023 levels is driven by increased profitability, lower working capital investments and lower capital expenditures than in 2023.

Gildan also announced that its preliminary Q1 2024 net sales are expected at approximately $695 million, or down about 1 percent year-over-year, as previewed in the company’s Q4 2023 press release.

Images courtesy President and CEO Vince Tyra (LinkedIn),  Houchens Industries