Gildan Activewear, a Canada-based leading manufacturer of branded clothing and accessories, has reported a drop in net sales of 8 per cent over the previous year to $1,543 million in the first half of fiscal 2023 (H1 FY23). This is largely due to a decrease in activewear sales, which fell by 10 per cent or $146 million from the same period last year, totalling $1,280 million. The company also reported a 10 per cent reduction in international sales to $118 million.

Despite this, the hosiery and underwear category demonstrated solid performance with sales increasing by 7 per cent or $18 million over the previous year, reaching a total of $264 million. This improvement was attributed to growth in both underwear and sock volumes.

The company's gross profit for H1 FY23 stood at $404 million, marking a decrease of $101 million from the prior year due to falling sales and reduced gross margins. The gross margin was reported to be 26.2 per cent, down by 410 basis points compared to the previous year, Gildan Activewear said in a media release.

Gildan Activewear managed to reduce its selling, general, and administrative expenses by $11 million to $160 million for H1 FY23. Consequently, selling, general, and administrative expenses as a percentage of net sales were 10.4 per cent, slightly above the 10.2 per cent recorded last year.

Operating income in H1 FY23 was reported at $311 million or 20.1 per cent of sales, a slight decrease from the $336 million or 20.1 per cent of sales recorded in the first half of the previous year. The company posted a GAAP diluted EPS and adjusted diluted EPS for the first half of $1.41 and $1.08 respectively, both showing a decline from the $1.62 reported in the previous year.

In Q2 FY23, the company reported net sales of $840 million, above expectations but reflecting a 6 per cent decline compared to the record quarter last year. Gross profit for the quarter was $217 million, or 25.8 per cent of sales, marking a decrease of $48 million from the previous year.

Selling, general, and administrative expenses were down 13 per cent or $11 million from last year to $78 million, or 9.3 per cent of sales.

Operating income for Q2 FY23 stood at $183 million, or 21.7 per cent of sales, a slight increase from $174 million or 19.4 per cent of sales reported in the same quarter of the previous year.

The company reported GAAP diluted EPS and adjusted diluted EPS for Q2 FY23 at $0.87 and $0.63 respectively, showing a slight increase from the $0.85 reported in the previous year, but a decrease from the adjusted diluted EPS of $0.86.

"We are pleased with our top line performance which came in ahead of our expectations for the quarter, up against a strong comparative period,” said Glenn J Chamandy, Gildan’s president and CEO. “Further, in a challenging macro environment, we are driving market share gains given our strong competitive position and continued execution on our GSG strategy."

Fibre2Fashion News Desk (DP)

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