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Gildan Activewear Q2 FY'13 sales up 8.4%
03
May '13
Gildan Activewear Inc. announced record results for the second quarter of a fiscal year, which were in excess of the guidance range which it had previously provided, in spite of challenging market conditions and the impact of unseasonal weather conditions in both operating segments.

The Company also updated its earnings guidance for fiscal 2013 which it had initiated on November 29, 2012 and reconfirmed on February 6, 2013, and provided guidance for sales and earnings for the third quarter of fiscal 2013.

Second Quarter Results

Net earnings were U.S. $72.3 million or U.S. $0.59 per share on a diluted basis for the second fiscal quarter ended March 31, 2013, compared with net earnings of U.S. $26.9 million or U.S. $0.22 per share in the second quarter of fiscal 2012.

Results for the second quarter of fiscal 2013 include restructuring and acquisition-related costs amounting to U.S. $0.4 million after tax. Before the restructuring and acquisition-related costs, adjusted net earnings for the second quarter of fiscal 2013 were U.S. $72.7 million or U.S. $0.59 per share, compared to adjusted net earnings of U.S. $27.8 million or U.S. $0.23 per share in the second quarter of last year.

The Company had previously projected adjusted net earnings of U.S. $0.54-$0.57 per share for the second quarter, when it reported its first quarter results on February 6, 2013.

Results were more favourable than projected due to lower than forecast promotional discounting in Printwear, partially offset by lower than forecast unit sales volumes, which the Company believes was largely due to cooler seasonal weather conditions in the second quarter, and a charge of U.S. $0.02 per share to provide for the cost of discontinuing certain Anvil product-lines in order to re-focus the brand on contemporary ring-spun products, which had not been reflected in the Company’s earnings guidance.

The growth in the Company’s net earnings compared to the second quarter of last year was due to the benefit of significantly lower cotton costs together with higher unit sales volumes in both operating segments, and more favourable product-mix for Branded Apparel, partially offset by lower selling prices for Printwear, including the U.S. $0.04 per share impact of a distributor inventory devaluation discount in the quarter, higher manufacturing costs, the charge for the discontinuation of Anvil product-lines, higher selling, general and administrative expenses and higher income taxes.

Net sales in the second quarter amounted to U.S. $523.0 million, up 8.4% from U.S. $482.6 million in the second quarter of fiscal 2012. The Company had projected sales for the second quarter of approximately U.S. $520 million. Sales for the Printwear segment amounted to U.S. $368.0 million, up 2.0% from U.S. $360.9 million in the second quarter of fiscal 2012, and sales for the Branded Apparel segment were U.S. $155.0 million, up 27.4% from U.S. $121.7 million in the second quarter of last year.

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