Gildan Activewear Inc announced its financial results for its second quarter ended April 1, 2007, as well as a 2-for-1 stock split. The Company also reiterated its earnings guidance for its 2007 fiscal year, and further updated its capital expenditure plans.
Second Quarter Sales and Earnings Gildan reported second quarter net earnings of U.S. $21.1 million and diluted EPS of U.S. $0.35, after recording a restructuring charge in the quarter of U.S. $16.4 million after-tax or U.S $0.27 per share, which was primarily related to the previously announced restructuring of the Company's Canadian and Mexican manufacturing facilities.
Before reflecting the restructuring charge, adjusted net earnings and adjusted diluted EPS for the second quarter of fiscal 2007 amounted to U.S. $37.5 million or U.S. $0.62, up respectively 21.0% and 21.6% from net earnings of U.S. $31.0 million and diluted EPS of U.S. $0.51 in the second quarter of fiscal 2006, and U.S. $0.01 per share higher than the earnings guidance previously provided by the Company.
The growth in EPS compared to last year was due to higher gross margins for activewear and continuing growth in activewear unit sales volumes, partially offset by increased selling, general and administrative and depreciation expenses. The impact of the Kentucky Derby Hosiery acquisition on the Company's results in the second quarter was dilutive by U.S. $0.03 per share, due primarily to short-term inefficiencies in manufacturing and distribution costs which are expected to be eliminated by the fourth quarter, as the Company progresses with the implementation of its integration plan.
Gildan is a vertically-integrated marketer and manufacturer of quality branded basic apparel. The Company is the leading supplier of activewear for the wholesale imprinted sportswear market in the U.S. and Canada, and also a leading supplier to this market in Europe.