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Gildan Activewear grows Q4 profit on higher sales, lower costs; meets estimates

MONTREAL – Gildan Activewear Inc. (TSX:GIL) says its quarterly dividend will be increased 20 per cent starting in January, reflecting the apparel manufacturer’s positive outlook for the coming year.

However, Gildan shares were down about four per cent in early trading after its guidance for 2014 earnings came in a few cents per share below analyst estimates.

Montreal-based Gildan, which reports in U.S. currency, is estimating between $3 and $3.10 per share of adjusted earnings and $2.35 billion of revenue for the year ending next September.

Prior to Gildan’s outlook, analysts were estimating 2014 adjusted earnings would climb to $3.14 per share with $2.38 billion of revenue in the 2014 financial year.

It shares fell $1.76 to C$49.54 in early trading at the Toronto Stock Exchange, despite Gildan’s expectation that it will continue to grow profit and revenue.

The company’s 2014 revenue projection would be up about 7.8 per cent from the 2013 financial year ended Sept. 28, when Gildan’s revenue was $2.18 billion, and up about 21 per cent from fiscal 2012.

It also had $2.69 per share of adjusted earnings in fiscal 2013, up from $1.29 per share in fiscal 2012.

Gildan announced Thursday that said the next quarterly dividend to shareholders, on Jan. 6, will be 10.8 cents per Gildan share, up 20 per cent from nine cents per share in the fourth quarter.

Dividends totalled $43.7 million in fiscal 2013, including $10.9 million in the fourth quarter, up from $36.6 million in fiscal 2012.

In the fourth quarter ended Sept. 28, Gildan had US$102 million of adjusted earnings in its fiscal fourth quarter — up about 7.5 per cent from the same time last year, the company reported Thursday.

Gildan’s adjusted net earnings equalled 83 cents per share, which were in line with analyst estimates and up from 78 cents per share in the fourth quarter of fiscal 2012.

The Montreal-based clothing company had US$628.1 million of net sales in the quarter ended Sept. 29, up about 11 per cent from US$561.6 million a year earlier.

Analysts had estimated 83 cents per share of adjusted earnings and US$603.9 million of revenue for the quarter, according to Thomson Reuters data.

Under standard accounting, Gildan had $96.3 million of net income or 79 cents per share on a diluted basis, up from $89 million or 73 cents per share a year earlier.

Gildan’s adjusted earnings exclude restructuring and acquisition costs, some tax-related items and Gildan’s hedging program for offsetting the impact of changing interest rates.