Dive Brief:
- Gildan Activewear Inc. reported a Q4 9% year-over-year net sales increase to $783 million, the company announced Wednesday.
- For the entire 2023 fiscal year, the activewear company reported $3.2 billion in net sales, a 1% decrease from the year prior. Gildan attributed the decline to a 3% decrease in activewear sales, but it also saw a 10% increase in the hosiery and underwear category.
- The company said it expects revenue growth to be flat to up low-single digits reflecting “potential for recovery in various markets” and taking into account the expiration of the Under Armour stock license agreement on March 31.
Dive Insight:
Despite looming controversy involving the ouster of former CEO Glenn Chamandy and an impending proxy fight, Gildan reported what it called “outstanding operational execution” in the quarter, according to Vince Tyra, president and CEO.
“The benign report contrasted with the controversy that has engulfed the company over the past two months,” David Swartz, senior equity analyst at Morningstar Research Services, wrote in an analyst note.
Gildan scheduled a special meeting of shareholders for May 28, following a month of calls from investor Browning West, LP. The move is Browning West’s effort to reinstate Chamandy. In response, Gildan said it filed an application to a Canada court to nullify Browning West’s requisition. If the application is successful, Gildan plans to cancel the May special shareholders meeting.
Neither Chamandy nor the special meeting were referenced in the company’s earnings release or on the call with investors Wednesday. Tyra, who became Gildan CEO last month, presented on the call to investors for the first time since stepping into the role, referencing becoming acquainted with the company.
“We are still unclear as to why Chamandy apparently disagreed with the board’s vision for Gildan’s future,” Swartz wrote. “On the earnings call, Tyra, who joined about one month ago, stated that he is committed to the Gildan Sustainable Growth strategy. The key parts of this plan are innovation, capacity expansion, and sustainability.”
For the first quarter of 2024, Gildan anticipates net sales to be down low-single digits year over year. The company attributed this to higher-than-expected “customer replenishment” in Q4 2023 that would lead to lower levels of replenishment in Q1 2024.
