Gildan Activewear Inc. reported sales in its first quarter climbed 34.8% to $250.5 million from $185.8 million a year ago. The gain was due to an increase of 92.7%, or US$39.4 million, in sock sales due to the acquisition of V. I. Prewett & Son and new retail sock programs, a 13.7% increase in unit sales volumes for activewear, and an increase of 2.5% in activewear unit selling prices. The growth came despite the elimination of unprofitable sock product-lines.
The growth in activewear unit sales was primarily due to continuing market share penetration in all product categories in the U.S. wholesale distributor channel. On a conference call, Gildan said it achieved record market shares in the T-shirt and fleece categories, and that overall industry shipments from U.S. distributors to screenprinters increased in the quarter.
Inventories in the U.S. distributor channel continue to be in good balance. During Q1, Gildan obtained its first underwear program with a U.S. national mass-market retailer. Shipments for this program will begin in May.
Outside the U.S., unit shipments to Canada, Europe, Asia/Pacific and Mexico increased 19.3%.
Gross margins improved to 31.5% from 29% due to higher activewear selling prices and increased manufacturing efficiencies for activewear. SG&A decreased to 13% of sales from 14.1% a year ago. Net earnings rose 76.2% to $27.5 million, or 23 cents a share, from $15.6 million, or 13 cents, a share. Looking ahead, Gildan increased its EPS guidance for the full year to a range of $1.85 to $1.90, up 43% to 47% from adjusted net earnings of $1.29 per share in fiscal 2007.
