Gildan Activewear Inc. saw sales in the third quarter total a record $233.9 million, up 17.6% from $198.9 million in the third quarter of last year. The increase in sales revenues reflected a 15.6% increase in unit sales volumes and the impact of a higher-valued product-mix, partially offset by an approximate 2.5% reduction in unit selling prices compared to last year. According to S.T.A.R.S. data, Gildan has a 43.6% market share, with a 44.5% share in T-shirts, a 32.7% share in sport shirts, and a 32.3% share in fleece.
Third quarter GM increased 80 basis points to 32.4% of sales from 31.6% in Q3 2005. The increase in gross margins was due to more favorable product-mix, increased manufacturing efficiencies, and lower cotton costs, partially offset by the impact of the reduction in selling prices as well as higher energy and transportation costs.
GIL reported net earnings of $42.8 million, or 71 cents per diluted share, up 25.5% from $34.1 million, or 57 cents per diluted share in the third quarter last year. Management attributed the increase in net earnings and EPS to continuing strong growth in unit sales volumes and higher gross margins, partially offset by increased selling, general, and administrative and depreciation expenses.
Gildan has increased its diluted EPS guidance for the full 2006 fiscal year to approximately $2.07. The revised full year guidance is up from the company’s most recent guidance of approximately $2.00 per share, and reflects a projected increase of 33.5% compared with adjusted EPS of $1.55 in fiscal 2005, before taking account of the prior year special charge.
