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Gildan to expand operations in South Asia

Montreal - Gildan Activewear is continuing to expand its presence in South Asia with the construction of a large-scale, vertically-integrated knitting and sewing facility in Bangladesh currently underway.

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Reporting record third sales, up 6 per cent year on year, Gildan said that the large-scale manufacturing hub will significantly enhance its position to service international markets and support other key sales growth drivers.

Net sales for the third quarter were $850 million, up from $802 million in the third quarter last year and consisted of activewear sales of $742 million, up 13 per cent, and sales in the hosiery and underwear category of $108 million, down 26 per cent over the prior year.

The increase in activewear sales was due to higher net selling prices, partly offset by lower sales volumes, as increased unit sales to North American distributors were more than offset by lower unit sales volumes of activewear stemming from demand weakness in retail and international markets. In the hosiery and underwear category, the sales decline compared to last year was driven by weak demand in retail and the impact of retailers managing their inventory levels.

“The strength of our activewear business, driven by North American imprintables sales, together with the benefits from our vertically-integrated manufacturing model, allowed us to deliver another strong quarter,” said Glenn J. Chamandy, Gildan’s President and CEO. “These results are a testament to the progress we are making under the Gildan Sustainable Growth strategy, which we remain fully focused on as we continue to drive to deliver on our three-year targets.”

Operating income was $175 million, or 20.5 per cent of sales in the quarter and adjusted operating income was $170 million, compared to operating income of $201 million, or 25.1% of sales, and adjusted operating income of $172 million, the third quarter last year.

The increase in capital expenditures primarily related to capacity projects, including expenditures for the construction of the new facilities in Bangladesh.

Net sales for the nine months ended October 2, 2022, were $2,520 million, up 18 per cent over the same period last year, reflecting an increase of 25 per cent in activewear sales, partly offset by a decline of 12 per cent in the hosiery and underwear category.

Looking forward Gildan said its North American business geared toward imprintables channels continues to benefit from demand driven by travel, tourism and large events and is expected to remain relatively stable. On the other hand, where it is seeing continued weakness is with its national account or retail-related customers, which represents a smaller part of our business. It is also continuing to see ongoing softness in demand for international markets.

 

 

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