Gildan Activewear (UPIC: GILDA381) has reported net earnings of $99.4 million for the three months ending July 5. Before restructuring and acquisition-related costs of approximately $3.2 million, the supplier reported adjusted net earnings of $102.6 million during that time period. During the same quarter last year, the supplier reported earnings of $116.6 million.
Consolidated net sales in the second quarter totaled $714.2 million, up 2.9 percent from the corresponding quarter in 2014. This reflects an increase of 12.3 percent in sales for branded apparel, partially offset by a 1.2 percent decline in printwear sales, largely due to selling-price reductions implemented in December 2014 and the lower number of shipping days compared to the same quarter last year. Sales in the second calendar quarter of 2014 included an extra week to realign the 52-week fiscal year with the calendar year.
Net earnings for second quarter 2015 continued to reflect the impact of the printwear selling-price reductions implemented in December 2014, in advance of the benefit of lower manufacturing and cotton costs. The positive earnings impact of higher sales and operating margins in branded apparel and lower income taxes was more than offset by lower printwear sales and operating margins and higher financial expenses.
During the previous three months ending July 5, Gildan generated $18.5 million of free cash flow after financing capital expenditures of $67.3 million and seasonal working capital changes. Capital investments were primarily for new yarn-spinning facilities in the U.S., textile projects in Rio Nance and the expansion of the company’s printwear distribution center in Eden, North Carolina. Gildan ended the quarter with cash and cash equivalents of $44.6 million and outstanding bank indebtedness of $593 million.
The supplier’s release on second quarter 2015 is available here.