Gildan Activewear seems to be avoiding the downward price pressures of the commoditized Tee-shirt industry and reported fiscal third quarter net earnings of $34.1 million, an increase of 30.2% over last year. EPS was 57 cents per share, a 29.5% gain over last year and well above previous guidance of 55 cents per share.
This increased profitability was fueled by an 18.1% increase in Q3 sales, which climbed to $198.9 million, and a 15.3% increase in unit shipments. Gross margins in the third quarter jumped 130 basis points to 31.6%, compared with 30.3% last year. The increase in gross margins was due to more favorable product-mix and lower cotton costs. SG&A expenses were 9.6% of sales, compared with 9.3% of sales in 2004.
Gildan recently increased its EPS guidance for the full 2005 fiscal year from approximately $1.40 per share to approximately $1.50 per share before special charges and $1.37 per share after the charges. The company continues to be comfortable with this revised guidance. Gildan is projecting EPS of approximately 42 cents per share for the fourth quarter, up 23.5% from 34 cents per share in Q4 of fiscal 2004.