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With the activist battle now in the rear-view mirror, Gildan Activewear Inc. has much to look forward to in 2025.
“By reinforcing our core competencies as a low-cost, large-scale, vertically integrated sustainable manufacturer, we continued to enhance our competitive advantage, and we are well positioned for continued growth in the years ahead,” Glenn J. Chamandy, Gildan’s president and CEO, said in a statement.
During a company conference call Wednesday after posting fourth-quarter results, Chamandy said the company Sustainable Growth Strategy (GSG) is “clearly driving profitable growth, as we are extremely pleased with our progress.” He said the company ended 2024, its 40th anniversary year, with “record revenues of about $3.3 billion.”
“We’re also committed and continuing executing on our GSG strategy across all our three pillars, capacity, innovation, and ESG,” he said, emphasizing the tees, sweats and fleece giant’s ability to “deliver on our three-year objectives we have laid out for 2025 to 2027 period, which include net sales of mid-single digit range, and adjusted diluted [earnings per share] growth in the mid-teen range.
He also spoke about strong drivers for 2025, which include new innovation and “very good reception” to Gildan’s Soft Cotton Technology. “We’re also excited about our Plasma Print Technology and other innovations such as Color Blast in our Comfort Colors brand, which we are seeing significant growth. In fact, the brand is up 40 percent for the full year in 2024,” Chamandy said. He also noted that the company is expanding its product line through distributors under the Champion brand via the license that was secured for the printwear channel.
“Our international business has seen a 20 percent increase in sales the last two quarters as these markets have started to recover, and our ability to service now stronger given the capacity expansion in Bangladesh and our product availability in these markets,” Chamandy added.
Chamandy’s top priority once re-installed as company CEO was to ensure that Gildan was on track to deliver on its three-year SGS targets. The old Gildan board in December 2023 fired company co-founder and longtime former CEO Chamandy, which led to a months-long battle for board control led by activist investor Browning West. The activist, who had the support of eight other institutional investors, as well as proxy advisory firms, ultimately won the fight and reinstated Chamandy.
During the company’s third quarter conference call in November, Chamandy emphasized that Gildan’s products are “still very attractively priced in the marketplace,” an indication that even with the prospect of tariffs and inflation, the Canadian firm likely can maintain its advantage over competitors.
And based on fourth quarter and full-year results, Gildan is expecting revenue growth for the full year to be up mid-single digits. Adjusted diluted EPS is projected in the range of $3.38 to $3.58, representing an increase of between 13 percent to 19 percent year-over-year. And the apparel giant is forecasting free cash flow to be above $450 million. The outlook reflects improvement in certain market that were weak in 2024, as well as market share gains and the favorable impact from new product launches.
Net sales for the first quarter of 2025 are expected to be up low single digits year-over-year.
For the fourth quarter ended Dec. 29, net income fell 13.7 percent to $132.3 million, or 86 cents a diluted share, from net income of $153.3 million, or 89 cents, a year ago. On an adjusted basis, diluted EPS was 83 cents for the quarter. Net sales rose nearly 5 percent to $821.5 million from $782.7 million. By division, activewear net sales rose 10.9 percent to $714.1 million. Hosiery and underwear net sales were down 22.6 percent to $107.4 million, mostly due to the impact of the phase-out of Under Armour. By geographic area, U.S. net sales were up 4.4 percent to $730.6 million and international sales increased 20.3 percent to $64.4 million. Net sales in Canada were down 10.7 percent to $26.5 million.
Cash flow from operating activities for the quarter decreased 11.9 percent for the quarter to $210.5 million from $239.1 million in the same year-ago quarter. With fewer capital expenditures in the quarter, free cash flow ended up rising 2.2 percent for the quarter to $207.7 million from $203.3 million.
For the year, net income was down 24.9 percent to $400.9 million, or $2.46 a diluted share, from net income of $533.6 million, or $3.03, in 2023. Net sales were up 2.3 percent to $3.27 billion from $3.2 billion.
Separately, the company said that Rhodri J. Harries, executive vice president and chief financial and administrative officer, will retire on Jan. 1, 2026. Luca Barlie, currently CFO for sales, marketing and distribution, will succeed him as executive vice president and chief financial officer on March 1, 2025. Harries will retain his chief administrative function until his retirement. And Chuck Ward, president of sales, marketing and distribution, has been appointed to the newly created role of executive vice president, chief operating officer, also effective March 1, 2025.
