Canada's Gildan Activewear posts gross profit of $188 mn in Q1 FY23

In Q1 FY23, sales in the activewear category were $588 million, down $80 million or 12 per cent from the same period last year. International sales were down 17 per cent versus the prior year, while the hosiery and underwear category showed strength with sales of $115 million, up $8 million or 7 per cent compared to Q1 FY22, mainly driven by sock volume growth.

Gross margin and adjusted gross margin were down year-over-year (YoY) by 430 basis points and 470 basis points, respectively, due to peak fibre costs, higher manufacturing input costs, and unfavourable mix. These factors were partly offset by higher net selling prices, the company said in its financial results for the first quarter ending April 2, 2023.

Selling, general, and administrative expenses for the first quarter were largely in line with prior year levels, but as a percentage of net sales, they were 11.6 per cent compared to 10.5 per cent last year, primarily due to sales deleverage.

The company generated operating income of $128 million in Q1 FY23, or 18.2 per cent of sales, compared to operating income of $162 million, or 20.9 per cent of sales in the first quarter last year.

"We are pleased with our top line results having met our sales expectations for the quarter” said Glenn J Chamandy, Gildan’s president and CEO. “Moreover, even though the economic environment remains uncertain, we remain comfortable with our full year outlook given our strong competitive position, which we are reinforcing with the Gildan Sustainable Growth (GSG) strategy, and point of sale (POS) trends across our business coming in line with our expectations during the first quarter."

Fibre2Fashion News Desk (DP)