Gildan finishes 2016 on a high note
Gildan Activewear Inc. ended 2016 on a high note following a busy and exciting year for the Montreal-based apparel manufacturer who recently won a bid to buy struggling t-shirt brand American Apparel.
Gildan announced on Thursday an 8.1 percent increase in net sales for a total of $587.9 million, in the fourth quarter which ended January 1, 2017. Results for the Printwear segment were in-line with the company's expectations, with sales growing to $325.8 million, while inventory reductions in the fourth quarter contributed to lower than anticipated sales in its Branded Apparel segment. Net sales for the Branded Apparel segment in the quarter were $262.1 million, still up by 1.2 percent. The company also noted that the acquisitions of Alstyle and Peds contributed approximately $50 million in sales in the fourth quarter of 2016.
Year-to-date consolidated net sales were up by 1 percent at $2,585.1 million in 2016, compared to $2,568.6 million reported in calendar 2015. The increase was again attributed to strong Printwear segment sales, while Branded Apparel sales were flat compared to the prior year.
Net earnings for 2016 were $346.6 million, or $1.47 per share on a diluted basis compared to $346.1 million or $1.42 per diluted share for the same period of the prior year.
For 2017, Gildan expects full-year earnings in the range of $1.60 to $1.70. Adjusted EBITDA for 2017 is expected to be in the range of $555 to $585 million. The company is also projecting another record year of strong free cash flow generation in excess of $400 million.
Net sales in 2017 in the Printwear and Branded Apparel segments are each expected to increase in the high single digit range.
The company’s CEO Glenn Chamandy told analysts during a conference call that Gildan will commit to manufacturing products under the American Apparel brand in the U.S.A.
Gildan bought the worldwide intellectual property rights related to the American Apparel brand for $88 million. The deal closed on February 8.
Still, the company is expecting earnings from the acquisition of American Apparel to be neutral in 2017.
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