Gildan Activewear Inc. has released its second-quarter results, which ended on July 4, 2021. The company’s Board of Directors also approved the restoration of its share buyback programme, which allows it to repurchase up to 5% of its issued and outstanding ordinary shares.
“During the second quarter, our business grew rapidly as economic activity in North America improved and the strength of our Back-to-Basics approach continued to create higher profitability,” said Glenn J. Chamandy, President and CEO of Gildan.
“Although the growth in our business in North America has been encouraging, the recovery outside of North America has been slow. Once again, our team displayed great operational capability by meeting our objectives while negotiating a congested supply chain.”
“In the second quarter, we achieved revenues of $747 million, up 225 percent year over year but down about 7% from record second quarter 2019 sales. Mr Chamandy continued, “Our total margin performance in the quarter was solid, rising sequentially and from pre-pandemic levels in the second quarter of 2019.”
“Gross margin was 32.2 percent, and adjusted gross margin1 was 30.5 percent, up 320 bps and 240 bps sequentially, respectively, when deducting the one-time 300 basis points (bps) benefit from the USDA pandemic assistance payment in the first quarter of 2021.
Gross margins rose significantly in the second quarter of 2019, increasing 440 basis points on an adjusted basis and 270 basis points on an unadjusted basis.
“In the second quarter of 2019, selling, general, and administrative (SG&A) expenses were 10.7% of income, up 170 basis points from the first quarter of 2021 and 80 basis points from 11.5 percent in the second quarter of 2019,” he stated.
“As a result, we generated GAAP diluted EPS of $0.74 and adjusted diluted EPS of $0.68, demonstrating a significant improvement over the loss we suffered last year as a result of the pandemic’s beginning. EPS and adjusted diluted EPS in the quarter were up 51% and 21%, respectively, compared to the second quarter of 2019. Furthermore, on the supply chain side, we continue to witness labour shortages in the United States, which have hampered yarn production and our ability to restock higher inventory levels. Raw material inputs and transportation-related factors are also tightening globally, putting inflationary pressure on the economy. As the recovery continues, we remain cautiously optimistic. We’re also delighted with how our Back-to-Basics approach is playing out and providing results, and we’re sure that it’s putting us in a good position to take advantage of market share opportunities and build long-term value for our shareholders as we move forward.” He added.
