Higher gross margins for activewear raise growth of Gildan EPS

07 Dec '07

3 min read

Sales in the fourth quarter amounted to U.S. $254.9 million, up 8.4% from U.S. $235.2 million in the fourth quarter of last year. The increase in sales revenues was due to an 8.9% increase in unit sales volumes for activewear and a 15.7% increase in unit sales volumes for socks, partially offset by a 1.4% reduction in unit selling prices for activewear compared to last year.

The growth in activewear unit sales was primarily due to continuing market share penetration in all product categories in the U.S. distributor channel. Growth in overall industry shipments from U.S. distributors to screenprinters in the September quarter was 2.4% .

Growth in the screenprint channel in international markets in the fourth quarter continued to be strong. Unit shipments in Europe increased by 20.9% compared with the fourth quarter of fiscal 2006.

Gross margins in the fourth quarter of fiscal 2007 were 32.2%, compared with 30.6% in the fourth quarter of fiscal 2006. Higher gross margins for activewear were partially offset by lower gross margins for socks. The increase in gross margins for activewear compared to last year was primarily due to further manufacturing efficiencies, partially offset by lower selling prices and higher cotton costs.

The lower gross margins for socks, compared to the fourth quarter of last year, reflected the consumption of high-cost inventories from outside contractors which were used to support major new retail programs during the transition of manufacturing to Gildan's new sock factory in Honduras. Virtually all of the basic men's and boy's products for these sock programs, as well as certain basic mass-market programs supplied by Prewett, are now being manufactured at Gildan's new sock facility in Honduras.

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Gildan Activewear Inc

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