Gildan Activewear saw a strong fourth quarter help finish a strong 2005 that left the company with a decent chunk of cash on hand and several options to explore. Small one-time fees were about the only downside as management discussed growing market share and retail penetration and even hinted at a possible acquisition in the near future.
Sales in the fourth quarter rose to $180.7 million, up 24.1% from $145.6 million in the fourth quarter a year ago, reflecting a 25.2% increase in unit shipments as a result of continuing market share penetration in all categories. Gildan estimates that market share in the quarter in the T-shirts category rose 5.8 percentage points to 35.9%, while share in the Sport Shirts category rose 8.4 percentage points to 31.7% of the total market, and the Fleece category outstripped the others, growing 8.5 points to 25.8% of total market share.
Gross margins in the fourth quarter increased 140 basis points to 32.3% of sales, compared with 30.9% in the fourth quarter of last year, while SG&A expenses decreased 250 points to 11.7% of sales from 14.2% last year. As a result of the back-end efficiencies, net earnings for the quarter were up 73.6% to $29.2 million from $16.8 million last year. Diluted earnings per share were 48 cents, up from 28 cents last year.
Looking ahead, the company expects earnings per share to increase 19.4% for the 2006 full year to $1.85 per share and 64% for the first quarter to 23 cents per share.
| Gildan Activewear | |||
| Fiscal Full Year Results | |||
| (in $ millions) | 2005 | 2004 | Change |
| Total Sales | $653.9 | $533.4 | 22.6% |
| GM% | 31.1% | 29.0% | +210 bps |
| Net Income | $86.0 | $60.3 | +42.8% |
| Diluted EPS | $1.43 | $1.01 | +41.6% |
| Inventory* | $134.9 | $116.6 | +15.6% |
| * at quarter-end | |||
