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Higher gross margins for activewear raise growth of Gildan EPS

Dec '07
Gildan Activewear Inc announced its financial results for its fourth quarter and full fiscal year ended September 30, 2007. The Company also reconfirmed its earnings guidance for its 2008 fiscal year.

Fourth Quarter Sales and Earnings:
Gildan reported fourth quarter net earnings of U.S. $40.9 million and diluted EPS of U.S. $0.34, after recording a restructuring charge in the quarter of U.S. $4.9 million after-tax or U.S. $0.04 per share, which was primarily related to the previously announced restructuring of the Company's Canadian, Mexican and U.S. manufacturing facilities.

Before reflecting the restructuring charge, adjusted net earnings and adjusted diluted EPS for the fourth quarter of fiscal 2007 amounted to U.S. $45.8 million or U.S. $0.38, up respectively 24.5% and 26.7% from adjusted net earnings of U.S. $36.8 million and adjusted diluted EPS of U.S. $0.30 in the fourth quarter of fiscal 2006.

The growth in EPS compared to last year was due to higher gross margins for activewear, continuing growth in activewear unit sales volumes and the impact of income tax recoveries, partially offset by lower activewear selling prices, higher raw material costs and higher selling, general and administrative and depreciation expenses.

The impact of the Kentucky Derby Hosiery acquisition was U.S. $0.01 accretive to EPS in the fourth quarter, as the negative impact of consuming high-cost inventories manufactured by external contractors was more than offset by the favourable impact of recognizing the tax benefit of Kentucky Derby Hosiery losses for the full fiscal year.

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