This growth aligns with the company’s forecasts and is particularly notable given the phase-out of their Under Armour business, which had minimal impact on profitability.
The activewear segment saw a 6% increase in sales, amounting to $2.83bn, driven by higher shipment volumes.
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However, the hosiery and underwear category experienced a 17% decline, largely due to the discontinuation of Under Armour products, less favourable product mix, and general market weakness in the underwear sector.
FY24 performance
Gildan’s financial performance saw a downturn with net earnings dropping 24% to $400.9m compared to $533.6m in the previous fiscal year. Its diluted earnings per share (EPS) also fell by 18.8% to $2.46.
The company’s operating income was reported at $618m or 18.9% of net sales, impacted negatively by expenses related to a proxy contest, leadership transitions, and related matters. In comparison, the prior year’s operating income was $644m or 20.1% of net sales.
Its selling, general and administrative (SG&A) expenses rose to $391m in FY24, up by $60m from the previous year, mainly due to increased costs associated with corporate governance disputes and executive changes totalling $83m in 2024 compared to $6m in 2023.
Despite these challenges, Gildan managed an increase in gross profit to $1bn, up by $124m from the prior year. This was attributed to higher sales and an improved gross margin of 30.7%, which increased by 320 basis points year over year due to lower raw material and manufacturing costs, although this was partially offset by slightly lower net selling prices.
Fourth quarter performance
In the fourth quarter (Q4) of FY24 alone, Gildan saw net sales increase by 5% to $822m. Excluding the Under Armour phase-out effects, net sales were up by low double digits with activewear sales climbing by 11%.
The hosiery and underwear category declined by 23%, consistent with expectations due to the Under Armour exit. However, excluding this factor, sales for this category grew by high single digits in Q4.
The company operating income for Q4 stood at $179m or 21.8% of net sales, including a positive impact from a $4m restructuring and acquisition-related recovery. This is comparable to operating income of $178m in the prior year quarter.
Q1 and full year 2025 outlook
Gildan anticipates mid-single-digit revenue growth for the full year 2025 with an adjusted operating margin improvement of roughly 50 basis points.
Adjusted diluted EPS is expected to range between $3.38 and $3.58, representing an approximate increase of 13% to 19% over the previous year.
For Q1 of 2025, the company forecasts low single-digit growth in net sales year over year. When accounting for the absence of Under Armour sock license agreement revenues, Q1 net sales are projected to rise by mid-single digits.
Leadership transition
Gildan has announced new executive leadership appointments and a CFO transition as part of its ongoing succession planning to ensure continuity while advancing the Gildan Sustainable Growth Strategy. Chuck Ward, currently president of sales, marketing, and distribution, will take on the newly established role of executive vice president, chief operating officer (EVP and COO), effective 1 March 2025. And EVP, chief financial and administrative officer, Rhodri (Rhod) Harries has announced his intention to retire on 1 January 2026.
