Q1 2025 Gildan Activewear Inc Earnings Call Transcript
Key Points
- Gildan Activewear Inc (GIL) reported first quarter sales of $712 million, up 2.3% year over year, driven by strong activewear sales growth of 9%.
- The company maintained its guidance for 2025, expecting mid single-digit revenue growth and adjusted EPS growth in the mid-teen range.
- Gildan's gross margin improved by 90 basis points to 31.2%, primarily due to lower raw material costs.
- The company is benefiting from its vertically integrated, low-cost manufacturing model, which provides flexibility and agility in a challenging macroeconomic environment.
- Gildan is seeing strong market response to its innovation pipeline, including soft cotton technology and plasma print, which is enhancing its competitive advantage.
- Sales in international markets decreased by 2% year over year, with softness in Asia and a tougher year-over-year comparison in Latin America.
- The hosiery and underwear category saw a significant decline of 38% due to the phase-out of the Under Armour business and unfavorable mix.
- The company's adjusted effective income tax rate increased to 15% from 3.6% last year, reflecting the enactment of global minimum tax in Canada and Barbados.
- Cash flows used in operating activities totaled $1,442 million, a significant increase from $27 million in the first quarter of 2024, primarily due to an increase in non-cash working capital.
- Gildan faces challenges from the recent 10% reciprocal tariff on goods imported to the US, although it has strategies in place to mitigate the impact.
Ladies and gentlemen, thank you for standing by and welcome to Gildden Activewares 2025 Q1 earnings conference call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jessy Hamm, senior Vice President, head of investor relations and global communications. Please go ahead.
Thank you, Sarah.
Good afternoon everyone, and thank you for joining us. Earlier today we issued a press release announcing our results for the first quarter and maintaining our guidance for 2025. We also issued our interim shareholder report containing management's discussion and analysis and consolidated financial statements. These documents are expected to be filed with the Canadian Securities and Regulatory Authorities and the US Securities Commission today, and they're available on our corporate website. As a reminder, please note that we'll be holding our AGM tomorrow morning at 10:00 a.m. Eastern time with more
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