Gildan Activewaer Inc. managed to turn in double-digit sales and earnings increases for the fiscal second quarter despite a 1.5% decrease in average selling prices. The company continues to progress on the development of new, lower cost manufacturing facilities overseas, and hopes to see the acquisition of a sock company that management hinted at during the previous quarters conference call “completed in the next couple of months.”
Sales in the second quarter amounted to $183.8 million, up 11.2% from $165.3 million in the second quarter of last year. The increase in sales revenues reflected a 13.9% increase in unit sales volumes, partially offset by the impact of an approximate 1.5% reduction in net selling prices.
Gross margins in the second quarter were 33.4%, versus 30.1% in the second quarter of 2005. SG&A expenses were 11.3% of sales, compared to 11.1% of sales for last years quarter.
Net earnings for the quarter were $31.0 million, up 40.3% from $22.1 million in the year-ago period, while diluted earnings per share were 51 cents, up from 37 cents last year.
The company has increased its EPS guidance for the full 2006 fiscal year to approximately $1.96 per share, compared with its most recent guidance of approximately $1.90 per share. Sales revenues for the full 2006 fiscal year are projected at approximately $740 million, representing an increase of approximately 13% over fiscal 2005.
Gildan projects diluted EPS for the third quarter of fiscal 2006 of approximately 63 cents per share, up approximately 10% from the third quarter of last year, and diluted EPS of approximately 56 cents per share in the fourth quarter, up approximately 19% from the fourth quarter of fiscal 2005.