Gildan Activewear Inc. GIL has reported first-quarter 2025 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. Also, revenues grew year over year and earnings remained flat compared with the prior year. The strong performance was driven by the company’s continued focus on executing its GSG strategy, despite ongoing macroeconomic challenges.

Insight Into GIL’s Q1 Performance

Gildan Activewear posted adjusted earnings of 59 cents per share, which beat the Zacks Consensus Estimate of 57 cents. The bottom line remained flat compared with the year-ago reported figure. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)

Gildan Activewear, Inc. Price, Consensus and EPS SurpriseGildan Activewear, Inc. Price, Consensus and EPS Surprise

Gildan Activewear, Inc. price-consensus-eps-surprise-chart | Gildan Activewear, Inc. Quote

Net sales totaled $711.7 million, a 2.3% increase year over year, marginally exceeding the Zacks Consensus Estimate of $711 million. Excluding the impacts of the Under Armour phase-out, net sales grew in the mid-single digits. 

Regarding segments, Activewear sales totaled $647.4 million, marking a 9.3% year-over-year increase, driven by higher sales volumes, which reflected favorable product mix in North America, with a greater proportion of fleece and ring-spun products.

In the Hosiery and Underwear category, net sales declined 38% year over year to $64.3 million, primarily attributed to the phase-out of the Under Armour program, an unfavorable product mix within the category and ongoing broader market weakness during the quarter.

Gildan Activewear’s Regional Performance Details

In the United States, sales reached $632.6 million, reflecting a 2.4% increase from $618 million in the prior year. In Canada, sales grew 10.3% to $27.9 million from $25.3 million. International sales declined 2.5% to $51.2 million from $52.5 million in the previous year.

GIL’s Margins & Costs

Adjusted gross profit was $221.9 million, up 5.1% year over year. The adjusted gross margin increased 90 basis points (bps) year over year to 31.2%, due to lower raw material costs.

Adjusted SG&A expenses increased 1% year over year to $86.5 million. As a percentage of net sales, this metric declined 20 bps year over year.

Adjusted operating income improved 7.9% to $135.5 million. The adjusted operating margin increased 100 bps year over year to 19%.

Adjusted EBITDA totaled $165.8 million. This represents a year-over-year increase of 5.5%. The adjusted EBITDA margin expanded 70 bps year over year to 23.3% in the quarter under review.

Story Continues

Gildan Activewear’s Other Financials

GIL ended the quarter with cash and cash equivalents of $75.5 million, long-term debt of $1.8 billion and stockholders' equity of $1.41 billion. Cash flows used in operating activities were $142.2 million during the quarter.

GIL’s 2025 Outlook

For 2025, net sales growth is expected to increase year over year in the mid-single digits. The adjusted operating margin is projected to improve 50 bps. Capital expenditure is anticipated to be 5% of sales. Adjusted earnings are expected between $3.38 and $3.58 per share, indicating a year-over-year increase of 13-19%. The free cash flow is anticipated to exceed $450 million.

For the second quarter of 2025, net sales are expected to increase year over year in the mid-single digits. The adjusted operating margin is projected to be in line with the second quarter of 2024. This included a significant positive impact from the jobs credit introduced in May 2024 by Barbados and which was retroactive to Jan. 1, 2024.

In the past three months, shares of this Zacks Rank #4 (Sell) company have lost 18.2% compared with the industry’s 31.6% decline.Zacks Investment Research

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