Gildan Activewear recently released its fourth-quarter earnings report, surpassing expectations in both earnings and revenue due to significant growth in core units. Let’s dive into the details.
Strong Financial Performance
The Canadian apparel manufacturer reported net income of $153.3 million, or 89 cents per share, a significant increase from the previous year’s $83.9 million or 47 cents per share. Adjusted earnings also saw a rise to 75 cents per share, exceeding analyst predictions of 73 cents per share.
Revenue Growth
Sales for the quarter amounted to $782.7 million, up from $720 million, surpassing analyst estimates of a more modest increase to $760 million. The company attributes this growth to strong performance in its largest unit, Activewear, where sales expanded due to higher volumes and increased customer replenishment levels compared to the previous year. Additionally, growth was seen in the hosiery and underwear category.
Future Outlook
Looking ahead to the full 2024 year, Gildan anticipates revenue growth to remain flat or increase by low-single digits. Adjusted earnings are forecasted to fall within the range of $2.92 and $3.07 per share, marking a 14% to 20% year-over-year rise.
Leadership Dispute
Gildan is currently embroiled in a leadership dispute involving Founder and Former Chief Executive Glenn Chamandy. Following the board’s decision to replace Chamandy with Vice Tyra, tensions have escalated as claims surfaced that Chamandy did not comply with the agreed-upon succession plan. Despite asserting that his contract was terminated without cause, Chamandy denied presenting an ultimatum to the company’s board.
Shareholder Concerns
In response to Chamandy’s removal, longtime shareholder Browning West has been vocal about reinstating him as CEO and proposed a slate of eight candidates for election to the board of directors. The upcoming annual shareholder meeting in May is expected to address these concerns and potentially reshape the company’s leadership landscape.
For more information, stay tuned for updates as the situation unfolds.