Consolidated net sales in the quarter were below the company’s guidance for net sales, mainly as a result of lower than anticipated Branded Apparel sales. Adjusted diluted EPS for the third quarter of 2015 were within the company’s guidance range of adjusted diluted EPS of US 0.51 – US 0.53.

Results for the fourth quarter are expected to be significantly in excess of earnings in the fourth quarter of any previous year, as the company benefits from manufacturing cost reductions from its capital expenditure programmes and lower cotton costs.

Segmented operating results

Net sales for the Printwear segment for the three months amounted to US 440.5 million, up by US 4.7 million or 1.1% from US 435.8 million in the corresponding quarter of the prior year. The increase in sales was due to continued unit volume growth in the US printwear market, the impact of the acquisition of Comfort Colors and unit sales volume growth in international printwear markets. Operating income in Printwear for the three months ended in October 2015 totalled US 124.4 million, up 4.6% from US 118.9 million in the same period last year.

Net sales for the Branded Apparel segment were US 234.0 million, up by 1.7% from US 230.2 million in the same quarter of last year. The increase in sales reflected an increase of approximately 30% in sales of Gildan branded programmes, including the impact of converting private label programmes. Operating income in Branded Apparel was US 30.2 million this year, up by 34.2% compared to operating income of US 22.5 million in the corresponding quarter of the prior year.

Other figures

Consolidated net sales of US 2,024.9 million in the first nine months of calendar 2015 were up by 6.1% compared to US 1,908.6 million in the same period last year, reflecting an increase of 10.5% in Branded Apparel segment sales and 4.0% sales growth in Printwear segment sales.

Net earnings for the first nine months of calendar 2015 were US 278.5 million, compared to US 317.9 million for the same period of the prior year. The decrease in net earnings was mainly due to the reduction in Printwear net selling prices, which were implemented in advance of the benefit of anticipated cost reductions and lower cotton costs.

Outlook

The company is now projecting adjusted diluted EPS for the 12 months ending on 3 January 2016 to be in the range of US 1.46 – US 1.48 on projected sales of close to US 2.55 billion. Adjusted EBITDA for the 12 months is now projected to be in excess of US 500 million.

Sales growth in Printwear for the full calendar year is now projected to be close to 10% compared to the company’s previous projection of Printwear sales growth in excess of 10%. The projected slight reduction in Printwear sales is due to unfavourable product mix in the fourth quarter as warmer seasonal weather is expected to result in lower seasonal sales of high-value fleece and long-sleeve T-shirts.

Branded Apparel sales growth for the full calendar year is now expected to be approximately 12% compared to previously anticipated sales growth of approximately 15%. The lower projected sales growth in Branded Apparel primarily reflects the sales shortfall in the third calendar quarter

www1.gildan.com