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