Gildan Activewear reports fourth quarter and full year 2016 results
February 23, 2017 – Gildan Activewear Inc. (TSX:GIL)(NYSE:GIL) announced sales for the full year ended January 1, 2017 were $2.59 billion (all figures U.S.). The company also announced it generated strong free cash flow in the quarter of $142 million resulting in record free cash flow of $398 million for the full year.
Adjusted EPS of $0.32 in the fourth quarter was up 14 per cent on sales of $588 million, which were up 8 per cent over the fourth calendar quarter of 2015.
The 8.1 per cent increase in consolidated sales in the quarter compared to the corresponding quarter in 2015 reflected sales increases of 14.4 per cent in the Printwear segment and 1.2 per cent in Branded Apparel. Growth was primarily driven by the impact of the Alstyle and Peds acquisitions which contributed approximately $50 million in sales in the fourth quarter of 2016.
Excluding after-tax restructuring and acquisition-related costs, Gildan reported adjusted net earnings of $74.5 million, or $0.32 per share on a diluted basis for the fourth quarter of 2016, up from $68.9 million, or $0.28 per share in the prior year quarter.
Segmented Operating Results
Printwear sales for the fourth quarter of 2016 grew strongly to $325.8 million, up 14.4 per cent from $284.9 million in the same calendar quarter last year. The increase was mainly due to the $30 million sales contribution from the Alstyle acquisition and organic unit sales volume growth driven by strong double digit volume growth in international printwear markets and higher sales of fashion basics. These positive factors were partly offset by lower net selling prices and the impact of unfavourable foreign currency exchange on international sales.
Net sales for the Branded Apparel segment in the quarter were $262.1 million, up 1.2 per cent from $258.9 million in the fourth calendar quarter of 2015. Despite a challenging retail environment, the approximate $20 million impact from the Peds acquisition combined with positive point of sales growth during the quarter more than offset the impact of significant retailer inventory destocking and the anticipated impact of the exit of certain private label programs as the Company had previously planned.
Year-to-date consolidated sales and earnings
Consolidated net sales of $2,585.1 million in 2016 were slightly up from $2,568.6 million in calendar 2015 due to a 1 per cent increase in Printwear segment sales, while Branded Apparel sales were flat compared to the prior year.
Net earnings for 2016 were $346.6 million, or $1.47 per share on a diluted basis compared to $346.1 million or $1.42 per diluted share for the same period of the prior year. Before reflecting after-tax restructuring and acquisition-related costs in both years, adjusted net earnings for 2016 were $356.3 million slightly up from adjusted net earnings in calendar 2015.