Gildan Activewear Inc. has announced its results for the second quarter ended July 4, 2021. The company also announced the approval by its Board of Directors for the reinstatement of its share buyback program to repurchase up to 5% of its issued and outstanding common shares.

“Our business continued to build momentum during the second quarter as economic activity in North America trended positively and the power of our Back-to-Basics strategy continued to drive stronger profitability,” said Gildan President and CEO, Glenn J. Chamandy.

We are encouraged by the recovery we have seen in our business in North America, although the recovery outside of North America remains weak

“Once again, our team demonstrated exceptional operational capability by delivering on our targets while navigating through a tight supply chain environment.”

“We generated sales of $747 million in the second quarter, up 225% over last year and down approximately 7% from record second quarter 2019 sales. Our overall margin performance in the quarter was strong, improving both sequentially and from pre-pandemic levels in the second quarter of 2019,” Mr Chamandy added.

“Gross margin totalled 32.2% and adjusted gross margin1 was 30.5%, which, when excluding the one-time 300 basis points (bps) benefit from the USDA pandemic assistance payment in the first quarter of 2021, was up sequentially by 320 bps and 240 bps, respectively. Gross margin performance also improved significantly over the second quarter of 2019, up 440 bps and 270 bps on an adjusted basis. Selling, general and administrative (SG&A) expenses in the quarter came in at 10.7% of sales, improving 170 bps from the first quarter of 2021 and 80 bps from 11.5% in the second quarter of 2019,” he said.

“Consequently, we delivered GAAP diluted EPS of $0.74 and adjusted diluted EPS of $0.68, reflecting a significant recovery over the loss incurred last year due to the effects of the onset of the pandemic. Compared to the second quarter of 2019, EPS and adjusted diluted EPS in the quarter were up 51% and 21%, respectively.”

Current Market Environment

“We are encouraged by the recovery we have seen in our business in North America, although the recovery outside of North America remains weak,” Mr Chamandy continued.

“Further, on the supply chain side, we continue to monitor U.S. labour shortages which have been affecting yarn production and our ability to rebuild higher inventory levels. We are also seeing tightness in raw material inputs and transportation-related factors globally which are creating inflationary pressure. Consequently, we remain cautiously optimistic as the recovery progresses. We are also pleased on how our Back-to-Basics strategy is unfolding and delivering results, and we remain confident that it is positioning us well to capitalize on market share opportunities and create value for our shareholders over the long-term, as we continue to move forward.

Full results, figures, and outlook