Gildan Activewear announces fiscal 2008 Q4 results
Gildan Activewear Inc announced its financial results for its fourth fiscal quarter and fiscal year ended October 5, 2008. The Company also provided earnings guidance for fiscal 2009 based on assuming a continuation of current negative market conditions, which are significantly impacting its results in the first quarter of fiscal 2009.
The Company believes that, while the current outlook for business conditions in fiscal 2009 is uniquely challenging, the economic upheaval in the industry will create opportunities for Gildan to build further on its leadership position in the U.S. screenprint channel, and continue to expand its presence in international markets and the U.S. mass-market retail channel.
The Company continues to feel confident that its competitive strengths, including its large-scale, vertically-integrated, strategically-located manufacturing facilities, together with its strong cash flow generation and low financial leverage, position it well to successfully achieve its long-term strategic growth objectives.
Gildan reported net earnings of U.S. $21.4 million and diluted EPS of U.S. $0.18 for the fourth quarter of fiscal 2008, compared to net earnings of U.S. $40.9 million, or U.S. $0.34 per share, during the fourth quarter of fiscal 2007. Fourth quarter results in fiscal 2008 included restructuring and other charges of U.S. $1.0 million after tax. Comparative results for fiscal 2007 included restructuring and other charges of U.S. $4.9 million after tax, or U.S. $0.04 per share. Restructuring and other charges in both years were primarily related to the restructuring and ongoing carrying costs pursuant to the closure of Canadian and U.S. manufacturing facilities.
Before reflecting the impact of restructuring charges in both fiscal years, adjusted net earnings were U.S. $22.4 million in the fourth quarter of fiscal 2008, compared to adjusted net earnings of U.S. $45.8 million in the fourth quarter of fiscal 2007. The U.S. $23.4 million decrease in adjusted net earnings was due to a U.S. $26.9 million, or U.S. $0.22 per share, one-time income tax charge resulting from the settlement of the Canada Revenue Agency ("CRA") audit, which is described in a separate press release issued. Excluding the impact of the tax charge, adjusted net earnings in the fourth quarter of fiscal 2008 were U.S. $49.3 million, or U.S. $0.41 per share.
Sales in the fourth quarter of fiscal 2008 amounted to U.S. $324.7 million, up 27.4% from U.S. $254.9 million in the fourth quarter of last year. The increase in sales revenues was due to the impact of the acquisition of Prewett, an approximate 10.2% increase in activewear unit selling prices and an 8.5% increase in unit sales volumes for activewear and underwear.
The growth in activewear unit sales in the fourth quarter was due to continuing market share penetration in all product categories in the U.S. wholesale distributor channel, as overall industry shipments from U.S. wholesale distributors to screenprinters declined by 3.1% in the quarter, while unit sales of Gildan products increased by 7.2% in spite of inventory constraints during the quarter which limited Gildan's ability to service demand in the U.S. screenprint channel, as well as demand in Europe.