Gildan Activewear sales in the company’s fiscal second quarter were $165.3 million, an increase of 16.9% due to a 10.4% increase in unit shipments, higher selling prices, and more favorable product-mix. The company said that it continues to be capacity-constrained while waiting for the opening of its new textile manufacturing facility in the Dominican Republic. The overall supply/demand balance in the wholesale activewear industry also continued to be in good balance, with supply shortages for some products keeping prices in check.

In spite of higher cotton, energy, and transportation costs, Gildan gross margins increased 280 basis points to 30.1% compared to 27.3% last year. The increase was the result of reduced promotional activity, more favorable product-mix, and capacity constraints keeping supply low. SG&A expenses were 11.1% of sales, compared with 10.7% of sales last year due to higher distribution expenses, provision for higher performance-related compensation expenses, and the stronger CN$.

Second quarter net income was flat at $14.3 million. Diluted EPS was also flat at 48 cents per share. Both metrics include special one-time charges related to the company’s closure of its Canadian yarn spinning facility and a negative impact on cost of sales of revaluing opening inventories. Without these charges income would have been $22.1 million or 74 cents per share.

With this solid Q2, GIL increased its earnings guidance for the year from approximately $2.60 per share to about $2.80 per share excluding the one-time charges, and approximately $2.54 per share after the charge. For Q3, Gildan projects EPS of approximately $1.00 per share compared to 88 cents per share last year.