Gildan Activewear Inc. (GIL: TSX and NYSE) today announced results
for the fourth quarter and full year ended December 29, 2024,
and initiated annual guidance for 2025. In addition, the Company
announced a dividend increase of 10% for 2025.
The Company's 40th anniversary year concluded on a high note
with record revenue of $3,271 million, adjusted operating
margin1 of 21.3% and year over year adjusted diluted EPS1 growth of
17%, fully in line with guidance provided. “This past year has been
a testament to the collective strength and dedication of our global
team, the loyalty of our customers, and the ongoing support and
trust of our shareholders. Reflecting on our full-year performance,
it’s clear that our success has been driven by our unwavering focus
on executing our GSG strategy. By reinforcing our core competencies
as a low-cost, large-scale, vertically integrated sustainable
manufacturer, we continued to enhance our competitive advantage,
and we are well positioned for continued growth in the years
ahead," said Glenn J. Chamandy, Gildan’s President and CEO.
Fourth Quarter 2024
ResultsNet sales were $822 million, up 5% over the
prior year. Excluding the impact of the Under Armour phase-out, net
sales were up low double digits. Activewear sales of $714 million,
were up 11% driven by higher sales volumes. We saw positive POS
across channels and product lines and continued to capture market
share in key growth categories, with a strong market response to
our recently introduced products which feature key innovations,
including our new Soft Cotton Technology. Furthermore, we saw
continued POS strength with National Account customers, driven by
our competitive positioning and as we continue to benefit from
recent changes in the industry landscape. International sales
increased by 20% year over year. In addition to higher year over
year sell-through in certain international markets, distributors
continued to replenish inventory benefiting from our improved
ability to service these markets through our global manufacturing
footprint. In the Hosiery and underwear category, net sales were
down 23% versus the prior year, in line with our expectations,
mainly owing to the phase out of the Under Armour business.
Excluding the impact of the Under Armour phase-out, sales for the
Hosiery and underwear category were up high single digits in the
fourth quarter.
We generated gross profit of $253 million, or 30.8% of sales,
versus $237 million, or 30.2% in the prior year representing a
60-basis point improvement which was primarily driven by lower raw
material costs.
SG&A expenses were $78 million compared to $88 million in
the prior year. Adjusting for charges related to the proxy contest
and leadership changes, adjusted SG&A1 expenses were $78
million, or 9.5% of net sales, compared to $82 million or 10.5% of
net sales for the same period last year. The year over year
reduction reflected the positive benefit of the jobs credit
introduced by Barbados partly offset by higher variable
compensation expenses and higher distribution expenses.
The Company generated operating income of $179 million, or 21.8%
of net sales including the positive impact from a $4 million
restructuring and acquisition-related recovery. This compares to
$178 million, or 22.8% of net sales last year, which included the
favorable impact of a $41 million reversal of hosiery-related
impairment charges partly offset by $11 million of restructuring
and acquisition-related costs related to the closure of a
yarn-spinning plant in the U.S. Adjusted operating income1 was
$175 million, or 21.3% of net sales, up $21 million or
160 basis points compared to the prior year.
Net financial expenses of $27 million, were up
$6 million over the prior year due to higher interest rates
and higher borrowing levels, with the Company repurchasing over 4
million shares in the quarter. As part of our ongoing strategy to
optimize our capital structure, in the fourth quarter we completed
our inaugural bond issuance in the principal amount of C$700
million in senior unsecured notes across two series. The majority
of the net proceeds were used to repay outstanding debt under our
credit facilities.
Reflecting the impact of the enactment of Global Minimum Tax
(GMT) in Canada and Barbados, the Company's adjusted effective
income tax rate1 for the quarter was 13.4% versus 3.1% last year.
After reflecting the positive benefit of a lower outstanding share
base, GAAP diluted EPS were $0.86, down 3% versus the prior year,
while adjusted diluted EPS1 were $0.83 compared to $0.75 last year,
up 11% year over year.
Full Year 2024
ResultsFor the year ended December 29, 2024,
net sales were $3,271 million, up 2% versus the same period
last year, in line with guidance. Excluding the impact of the Under
Armour phase-out, which had minimal impact on profitability, net
sales were up mid-single digits year over year. In Activewear, we
generated sales of $2,831 million, up $163 million or 6%,
driven by increased shipments. We saw positive POS trends in North
America and observed strong momentum at National Account customers,
which were partly offset by slightly lower net selling prices.
Activewear sales also reflected market share gains in key growth
categories, and a strong market response to our recently introduced
products featuring key innovations. International sales of
$252 million were up 12% versus last year, reflecting demand
stabilization and some recovery in POS, as well as distributor
inventory replenishment from previously suboptimal levels. In the
Hosiery and underwear category, sales were down 17% versus the
prior year mainly reflecting the phase out of the Under Armour
business, less favourable mix and broader market weakness in the
underwear category. Excluding the impact of the Under Armour
phase-out, sales for the Hosiery and underwear category increased
by mid-single digits year over year.
The Company generated gross profit of $1,004 million up $124
million versus the prior year, driven by the increase in sales and
gross margin. Gross margin of 30.7%, was up by 320 basis points
year over year mainly a result of lower raw material and
manufacturing input costs, partly offset by slightly lower net
selling prices.
SG&A expenses were $391 million, $60 million above
prior year levels, mainly reflecting higher expenses related to the
proxy contest, leadership changes and related matters which were
$83 million in 2024 and $6 million in 2023. Excluding
these charges, adjusted SG&A expenses1 were $308 million, or
9.4% of net sales, compared to $324 million, or 10.1% of net sales
last year, reflecting the benefit of the jobs credit introduced by
Barbados in the second quarter of 2024, partly offset by higher
variable compensation expenses and higher distribution
expenses.
The Company generated operating income of $618 million, or
18.9% of net sales, reflecting the negative impact of the expenses
for the proxy contest, leadership changes and other related
matters. This compares to operating income of $644 million or
20.1% of net sales in 2023 which included the benefit of a $77
million net insurance gain, a $41 million non-cash reversal of
a portion of a prior hosiery-related impairment charge, and a $25
million gain from the sale and leaseback of one of our U.S.
distribution facilities, partly offset by restructuring costs of
$46 million. Excluding these items, as well as the expenses
for the proxy contest, leadership changes and other related matters
in both years, adjusted operating income1 was $696 million, up
$143 million year over year. Adjusted operating margin1 was
21.3% of net sales, up 400 basis points compared to the prior year,
in line with guidance.
Net financial expenses of $104 million were up $24 million over
the prior year due to higher interest rates and higher borrowing
levels. As previously communicated, due to the enactment of GMT in
Canada and Barbados, our income tax expenses were significantly
higher than the prior year, with our full year adjusted effective
income tax rate1 increasing to approximately 17.2% from 4.4% last
year. Reflecting the benefit of a lower outstanding share base,
GAAP diluted EPS were $2.46, down 19% from $3.03 in the prior year.
Adjusted diluted EPS1 increased by 17% to $3.00 from $2.57 in the
prior year and were fully in line with guidance.
Cash flows from operating activities totaled $501 million,
compared to $547 million in the prior year, with both years
impacted by the non-recurring items mentioned earlier. After
accounting for lower capital expenditures totaling $150 million,
and lower year over year proceeds from sale and leaseback, disposal
of assets held for sale and other disposals, the Company generated
approximately $389 million of free cash flow1 essentially in
line with the prior year. During 2024, the Company continued to
execute on its capital allocation priorities returning a record
$889 million to shareholders, including dividends and share
repurchases of $756 million, or about 18 million shares under our
normal course issuer bid (NCIB) representing about 11% of our
public float. We ended the year with net debt1 of
$1,569 million and a leverage ratio of 1.9 times net debt to
trailing twelve months adjusted EBITDA1, well within our targeted
debt range of 1.5x to 2.5x net debt to adjusted EBITDA1.
OutlookOver the past year, we have continued to
make progress on key strategic initiatives, driving market share
gains in key product categories, despite a mixed macroeconomic
backdrop and soft demand in certain retail markets. Our vertically
integrated model, operational excellence, and steadfast commitment
to executing our Gildan Sustainable Growth (GSG) strategy across
all three key pillars—capacity, innovation and ESG— position us
well for 2025. Furthermore, with this strong foundation, a further
strengthened competitive position and a disciplined approach to
return capital to shareholders, we remain excited about our ability
to drive performance and achieving the three-year objectives for
the 2025 to 2027 period, put forth in August 2024. These objectives
include, among others, net sales growth at a compound annual growth
rate in the mid-single digit range and adjusted diluted EPS1 growth
at a compound annual growth rate in the mid-teen range.
For 2025, we expect the following:
- Revenue growth for the full year to be up mid-single
digits;
- Full year adjusted operating margin1 to be up approximately 50
basis points;
- Capex to come in at approximately 5% of sales;
- Adjusted diluted EPS1 in the range of $3.38 to $3.58, up
between ~13% and ~19% year over year;
- Free cash flow1 to be above $450 million.
The assumptions underpinning our 2025 guidance are as
follows:
- Our outlook reflects continued growth in key product categories
partly driven by recently introduced innovation, overall POS
growth, market share gains, the favorable impact from new program
launches as well as some improvement in certain markets that
remained soft in 2024.
- Ongoing benefits from the jobs credit program that took effect
in Barbados in 2024.
- Following the implementation of the Global Minimum Tax
legislation in Canada and Barbados, our effective tax rate for 2025
to remain at a similar level to 2024.
- Continued share repurchases under our NCIB program, given the
strength of our balance sheet, our expected strong free cash flow1,
and our leverage framework target of 1.5x to 2.5x net debt to
adjusted EBITDA1.
For the first quarter of 2025, net sales are expected to be up
low single digits year over year. Excluding the impact of the Under
Armour sock license agreement, Q1 net sales are expected to be up
mid-single digits. Adjusted operating margin1 is expected to be in
line with our full year guidance of 'up approximately 50 basis
points'. Of note, the enactment of GMT in Canada and Barbados only
took place during the second quarter of 2024. As such, on a
comparable basis, the Company's adjusted effective income tax rate1
in the first quarter of 2025 is expected to be significantly higher
than the 3.6% recorded in the first quarter of 2024.
The above outlook for the full year and first quarter of 2025,
as well as the three-year objectives, assume no meaningful
deterioration from current market conditions including the pricing
and inflationary environment, the absence of a significant shift in
labour conditions or the competitive environment, and no meaningful
deterioration in global trade and geopolitical environments,
including as a result of changes to multilateral trade frameworks.
They reflect reasonable industry growth and expected market share
gains. They also assume the continued benefit from the jobs credits
in Barbados. In addition, they reflect Gildan’s expectations as of
February 19, 2025, and are subject to significant risks and
business uncertainties, including those factors described under
“Forward-Looking Statements” in this press release and the annual
MD&A for the year ended December 29, 2024.
Executive Leadership Changes Including CFO
TransitionIn a separate press release issued concurrently
today, the Company announced the following executive leadership
nominations and a CFO transition as part of a multi-year succession
planning process, which are intended to ensure strong continuity as
the Company drives forward with the Gildan Sustainable Growth
Strategy:
- Chuck Ward, currently President, Sales, Marketing and
Distribution, has been appointed to the newly created role of
Executive Vice President, Chief Operating Officer (EVP and COO)
effective March 1, 2025.
- Rhodri (Rhod) J. Harries, EVP, Chief Financial and
Administrative Officer, will retire on January 1, 2026.
- Luca Barile, currently CFO, Sales, Marketing and Distribution,
to succeed Rhod as EVP, Chief Financial Officer as of March 1,
2025.
Environmental, Social and Governance (ESG)
HighlightsAs recently announced in January 2025, the
Company was included on the Dow Jones Best-in-Class North America
Index (formerly the Dow Jones Sustainability™ North America Index)
for its ongoing efforts towards ESG initiatives, marking its 12th
consecutive year of inclusion in this index. More recently, Gildan
was also included in the 2025 Sustainability Yearbook for the 13th
consecutive year based on S&P Global’s Corporate Sustainability
Assessment for its demonstrated sustainability practices.
Increase in Quarterly DividendOn February 18,
2025, the Board of Directors approved a 10% increase in the amount
of the current quarterly dividend and has declared a cash dividend
of $0.226 per share, payable on April 7, 2025, to shareholders of
record on March 12, 2025. This dividend is an “eligible dividend”
for the purposes of the Income Tax Act (Canada) and any other
applicable provincial legislation pertaining to eligible
dividends.
Normal Course Issuer BidDuring the fourth
quarter, the Company completed share repurchases under its NCIB
ending August 8, 2025. A total of 4.4 million common shares were
repurchased for cancellation during the fourth quarter at a total
cost of approximately $214 million (including $4.3 million of taxes
on share repurchases). Under its current normal course issuer bid
("NCIB") that commenced on August 9, 2024, and will end on August
8, 2025, Gildan is authorized to repurchase for cancellation up to
16,106,155 common shares, representing approximately 10% of
Gildan’s “public float” (as such term is defined in the TSX Company
Manual) as of July 26, 2024. The NCIB is conducted by means of
purchases through the facilities of the TSX and the NYSE and
through alternative Canadian trading systems. During the period
from August 9, 2024 to February 19, 2025, Gildan purchased for
cancellation a total of 9.9 million common shares, representing
6.7% of the Company’s issued and outstanding common shares as at
July 26, 2024. Gildan’s management and the Board of Directors
believe the repurchase of common shares represents an appropriate
use of Gildan’s financial resources and that share repurchases
under the NCIB will not preclude Gildan from continuing to pursue
organic growth and complementary acquisitions.
Disclosure of Outstanding Share DataAs at
February 17, 2025, there were 151,851,182 common shares issued
and outstanding along with 282,737 stock options and 1,568,820
dilutive restricted share units (Treasury RSUs) outstanding. Each
stock option entitles the holder to purchase one common share at
the end of the vesting period at a predetermined option price. Each
Treasury RSU entitles the holder to receive one common share from
treasury at the end of the vesting period, without any monetary
consideration being paid to the Company.
Conference Call InformationGildan Activewear
Inc. will hold a conference call to discuss fourth quarter and full
year 2024 results and its business outlook today at 8:30 AM ET. A
live audio webcast of the conference call, as well as a replay,
will be available on Gildan's company website at the following
link: http://www.gildancorp.com/events. The conference call can be
accessed by dialing toll-free (800) 715-9871 (Canada & U.S.) or
(646) 307-1963 (international) and entering passcode 3105768. A
replay will be available for 7 days starting at 11:30 AM ET by
dialing toll-free (800) 770-2030 (Canada & U.S.) or (609)
800-9909 (international) and entering the same passcode.
NotesThis release should be read in conjunction
with the attached unaudited condensed financial statements as at
and for the three and twelve months ended December 29, 2024,
and Gildan's Management’s Discussion and Analysis and its audited
consolidated financial statements for the fiscal year ended
December 29, 2024 which will be filed by Gildan with the
Canadian securities regulatory authorities and with the U.S.
Securities and Exchange Commission and will also be provided on
Gildan's website. Gildan has filed its annual report on Form 40-F
for the year ended December 29, 2024 with the SEC. The Form
40-F, including the audited combined financial statements, included
therein, is available at https://gildancorp.com/en/ and on EDGAR at
http://www.sec.gov. Hard copies of the audited combined financial
statements are available free of charge on request by calling (514)
744-8515.
Certain minor rounding variances may exist between the condensed
consolidated financial statements and the table summaries contained
in this press release.
| Supplemental Financial
Data |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
CONSOLIDATED FINANCIAL DATA (UNAUDITED) |
|
|
|
|
|
|
|
|
|
| (in $
millions, except per share amounts or otherwise indicated) |
Three months ended |
|
Twelve months ended |
|
December29, 2024 |
|
December31, 2023 |
|
Variation(%) |
|
|
December29, 2024 |
|
December31, 2023 |
|
Variation(%) |
|
|
Net sales |
821.5 |
|
782.7 |
|
5.0 |
% |
|
3,270.6 |
|
3,195.9 |
|
2.3 |
% |
| Gross profit |
253.0 |
|
236.6 |
|
6.9 |
% |
|
1,003.7 |
|
880.1 |
|
14.0 |
% |
| Adjusted gross profit(1) |
253.0 |
|
236.6 |
|
6.9 |
% |
|
1,003.7 |
|
876.9 |
|
14.5 |
% |
| SG&A expenses |
78.3 |
|
88.3 |
|
(11.3 |
)% |
|
390.8 |
|
330.4 |
|
18.3 |
% |
| Adjusted SG&A
expenses(1) |
77.9 |
|
82.0 |
|
(5.0 |
)% |
|
308.1 |
|
324.1 |
|
(4.9 |
)% |
| Gain on sale and
leaseback |
— |
|
— |
|
n.m |
. |
|
— |
|
(25.0 |
) |
n.m |
. |
| Net insurance gains |
— |
|
— |
|
n.m |
. |
|
— |
|
(74.2 |
) |
n.m |
. |
| Restructuring and
acquisition-related (recoveries) costs |
(4.3 |
) |
10.9 |
|
n.m |
. |
|
(5.3 |
) |
45.8 |
|
n.m |
. |
| Impairment (Impairment
reversal) of intangible assets |
— |
|
(40.8 |
) |
n.m |
. |
|
— |
|
(40.8 |
) |
n.m |
. |
| Operating income |
179.0 |
|
178.1 |
|
0.5 |
% |
|
618.2 |
|
643.9 |
|
(4.0 |
)% |
| Adjusted operating
income(1) |
175.1 |
|
154.6 |
|
13.3 |
% |
|
695.6 |
|
552.8 |
|
25.8 |
% |
| Adjusted EBITDA(1) |
208.4 |
|
185.4 |
|
12.4 |
% |
|
833.8 |
|
674.5 |
|
23.6 |
% |
| Financial expenses |
26.9 |
|
21.2 |
|
26.8 |
% |
|
104.2 |
|
79.7 |
|
30.7 |
% |
| Income tax expense |
19.7 |
|
3.6 |
|
n.m |
. |
|
113.2 |
|
30.6 |
|
n.m |
. |
| Net earnings |
132.3 |
|
153.3 |
|
(13.7 |
)% |
|
400.9 |
|
533.6 |
|
(24.9 |
)% |
|
Adjusted net earnings(1) |
128.2 |
|
129.2 |
|
(0.8 |
)% |
|
489.7 |
|
452.6 |
|
8.2 |
% |
|
Basic EPS |
0.86 |
|
0.89 |
|
(3.4 |
)% |
|
2.46 |
|
3.03 |
|
(18.8 |
)% |
| Diluted EPS |
0.86 |
|
0.89 |
|
(3.4 |
)% |
|
2.46 |
|
3.03 |
|
(18.8 |
)% |
|
Adjusted diluted EPS(1) |
0.83 |
|
0.75 |
|
10.7 |
% |
|
3.00 |
|
2.57 |
|
16.7 |
% |
|
Gross margin(2) |
30.8 |
% |
30.2 |
% |
0.6 |
pp |
|
30.7 |
% |
27.5 |
% |
3.2 |
pp |
| Adjusted gross margin(1) |
30.8 |
% |
30.2 |
% |
0.6 |
pp |
|
30.7 |
% |
27.4 |
% |
3.3 |
pp |
| SG&A expenses as a
percentage of sales(3) |
9.5 |
% |
11.3 |
% |
(1.8) |
pp |
|
11.9 |
% |
10.3 |
% |
1.6 |
pp |
| Adjusted SG&A expenses as
a percentage of sales(1) |
9.5 |
% |
10.5 |
% |
(1.0) |
pp |
|
9.4 |
% |
10.1 |
% |
(0.7) |
pp |
| Operating margin(4) |
21.8 |
% |
22.8 |
% |
(1.0) |
pp |
|
18.9 |
% |
20.1 |
% |
(1.2) |
pp |
|
Adjusted operating margin(1) |
21.3 |
% |
19.7 |
% |
1.6 |
pp |
|
21.3 |
% |
17.3 |
% |
4.0 |
pp |
|
Cash flows from operating activities |
210.5 |
|
239.1 |
|
(11.9 |
)% |
|
501.4 |
|
546.6 |
|
(8.3 |
)% |
| Capital expenditures |
40.6 |
|
35.6 |
|
13.9 |
% |
|
150.4 |
|
208.0 |
|
(27.7 |
)% |
| Free cash flow(1) |
207.7 |
|
203.3 |
|
2.2 |
% |
|
389.3 |
|
391.7 |
|
(0.6 |
)% |
| Diluted
weighted average number of common shares outstanding (in
‘000s) |
154,369 |
|
171,806 |
|
n/a |
|
|
163,179 |
|
176,224 |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
As at (in $ millions, or otherwise indicated) |
|
|
|
|
|
December29, 2024 |
|
December31, 2023 |
|
|
Inventories |
|
|
|
|
|
1,110.6 |
|
1,089.4 |
|
| Trade accounts receivable |
|
|
|
|
|
542.4 |
|
412.5 |
|
| Net debt(1) |
|
|
|
|
|
1,568.6 |
|
993.4 |
|
| Net
debt leverage ratio(1) |
|
|
|
|
|
1.9 |
|
1.5 |
|
(1) This is a non-GAAP financial measure or ratio. Please refer
to "Non-GAAP Financial Measures" in this press release.(2) Gross
margin is defined as gross profit divided by net sales. (3)
SG&A as a percentage of sales is defined as SG&A divided by
net sales.(4) Operating margin is defined as operating income
(loss) divided by net sales.n.m. = not meaningfuln/a = not
applicable
DISAGGREGATION OF REVENUE
Net sales by major product group were as follows:
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions, or otherwise indicated) |
December29, 2024 |
|
December31, 2023 |
|
Variation(%) |
|
|
December29, 2024 |
|
December31, 2023 |
|
Variation(%) |
|
|
Activewear |
714.1 |
|
644.0 |
|
10.9 |
% |
|
2,831.1 |
|
2,668.0 |
|
6.1 |
% |
| Hosiery
and underwear |
107.4 |
|
138.7 |
|
(22.6 |
)% |
|
439.5 |
|
527.9 |
|
(16.8 |
)% |
|
|
821.5 |
|
782.7 |
|
5.0 |
% |
|
3,270.6 |
|
3,195.9 |
|
2.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales were derived from customers located in the following
geographic areas:
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions, or otherwise indicated) |
December29, 2024 |
|
December31, 2023 |
|
Variation(%) |
|
|
December29, 2024 |
|
December31, 2023 |
|
Variation(%) |
|
|
United States |
730.6 |
|
699.5 |
|
4.4 |
% |
|
2,911.0 |
|
2,858.1 |
|
1.9 |
% |
| Canada |
26.5 |
|
29.7 |
|
(10.7 |
)% |
|
107.6 |
|
112.4 |
|
(4.3 |
)% |
|
International |
64.4 |
|
53.5 |
|
20.3 |
% |
|
252.0 |
|
225.4 |
|
11.8 |
% |
|
|
821.5 |
|
782.7 |
|
5.0 |
% |
|
3,270.6 |
|
3,195.9 |
|
2.3 |
% |
INCOME TAX EXPENSE AND IMPACT OF GLOBAL MINIMUM TAX
(GMT)
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions, or otherwise indicated) |
December29, 2024 |
|
December31, 2023 |
|
|
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
| Income tax expense: |
|
|
|
|
|
|
Tax expense excluding impact of GMT and other items below |
2.7 |
|
4.1 |
|
|
21.3 |
|
20.6 |
|
27.6 |
|
|
Impact of increase in corporate tax rate |
10.7 |
|
— |
|
|
47.5 |
|
— |
|
— |
|
|
Impact of GMT top-up tax |
6.5 |
|
— |
|
|
33.0 |
|
— |
|
— |
|
|
Income tax expense (recovery) relating to restructuring charges and
other adjustments |
0.4 |
|
(0.5 |
) |
|
0.5 |
|
10.0 |
|
7.2 |
|
|
Income tax recovery related to the revaluation of deferred income
tax assets and liabilities |
— |
|
— |
|
|
— |
|
— |
|
(9.9 |
) |
|
Impact of Barbados tax rate changes on the revaluation of deferred
income tax assets and liabilities |
(0.6 |
) |
— |
|
|
10.9 |
|
— |
|
— |
|
|
Total income tax expense |
19.7 |
|
3.6 |
|
|
113.2 |
|
30.6 |
|
24.9 |
|
|
Adjustments for: |
|
|
|
|
|
|
Income tax recovery (expense) relating to restructuring charges and
other adjustments |
(0.4 |
) |
0.5 |
|
|
(0.5 |
) |
(10.0 |
) |
(7.2 |
) |
|
Income tax recovery related to the revaluation of deferred income
tax assets and liabilities |
— |
|
— |
|
|
— |
|
— |
|
9.9 |
|
|
Impact of Barbados tax rate changes on the revaluation of deferred
income tax assets and liabilities |
0.6 |
|
— |
|
|
(10.9 |
) |
— |
|
— |
|
|
Adjusted income tax expense(3) |
19.9 |
|
4.1 |
|
|
101.8 |
|
20.6 |
|
27.6 |
|
| Earnings before income
taxes |
152.0 |
|
156.9 |
|
|
514.1 |
|
564.2 |
|
566.4 |
|
|
Adjustments(1)(4) |
(3.9 |
) |
(23.6 |
) |
|
77.4 |
|
(91.0 |
) |
35.9 |
|
|
Adjusted earnings before income taxes(3) |
148.1 |
|
133.3 |
|
|
591.5 |
|
473.2 |
|
602.3 |
|
| Average effective income tax
rate(2) |
13.0 |
% |
2.3 |
% |
|
22.0 |
% |
5.4 |
% |
4.4 |
% |
|
Adjusted effective income tax rate(3) |
13.4 |
% |
3.1 |
% |
|
17.2 |
% |
4.4 |
% |
4.6 |
% |
(1) Adjustments are detailed in section entitled "Certain
adjustments to non-GAAP measures" in this press release. (2)
Average effective income tax rate is calculated as income tax
expense divided by earnings before income taxes. (3) Adjusted
income tax expense and adjusted earnings before income taxes are
non-GAAP financial measures, and adjusted effective income tax rate
is a non-GAAP ratio calculated as adjusted income tax expense
divided by adjusted earnings before income taxes. Refer to the
section "Non-GAAP financial measures and related ratios" in this
press release. (4) Adjustments for the fiscal year ended 2024 of
$77.4 million include $82.7 million in costs relating to
proxy contest and leadership changes and related matters, partially
offset by $5.3 million for restructuring and
acquisition-related recoveries. Adjustments for the fiscal year
ended 2023 of $91.0 million (gain), consisting of
$77.3 million of net insurance gains, a $25.0 million
pretax gain on sale and leaseback and a $40.8 million (gain)
for the reversal of impairment of intangible assets, partially
offset by $45.8 million (loss) for restructuring and
acquisition related costs, and $6.3 million (loss) relating to
proxy contest and leadership changes and related matters.
Adjustments for fiscal 2022 of $35.9 million, include
$62.3 million (loss) for the impairment of intangible assets,
a $0.5 million (loss) for restructuring and acquisition
related costs, partially offset by $25.9 million in net
insurance gains and $1.0 million for the impact of strategic
product line initiatives.
Non-GAAP financial measures and related
ratiosThis press release includes references to certain
non-GAAP financial measures, as well as non-GAAP ratios as
described below. These non-GAAP measures do not have any
standardized meanings prescribed by International Financial
Reporting Standards (IFRS) and are therefore unlikely to be
comparable to similar measures presented by other companies.
Accordingly, they should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. The terms and definitions of the non-GAAP measures used in
this press release and a reconciliation of each non-GAAP measure to
the most directly comparable IFRS measure are provided below.
Certain adjustments to non-GAAP measuresAs
noted above certain of our non-GAAP financial measures and ratios
exclude the variation caused by certain adjustments that affect the
comparability of the Company's operating and financial results and
could potentially distort the analysis of trends in its business
performance. Adjustments which impact more than one non-GAAP
financial measure and ratio are explained below:
Restructuring and acquisition-related (recoveries) costs
Restructuring and acquisition-related (recoveries) costs are
comprised of costs directly related to significant exit activities,
including the closure of business locations and sale of business
locations or the relocation of business activities, significant
changes in management structure, as well as transaction, exit, and
integration costs incurred pursuant to business acquisitions.
Restructuring and acquisition-related costs are included as an
adjustment in arriving at adjusted operating income, adjusted
operating margin, adjusted net earnings, adjusted earnings before
income taxes, adjusted diluted EPS, and adjusted EBITDA.
Restructuring and acquisition-related recoveries were
$5 million for the fiscal year ended December 29, 2024 (2023 -
$46 million (costs), 2022 - $0.5 million (costs)).
Impairment (Impairment reversal) of intangible assets, net of
write-downsDuring the fourth quarter of fiscal 2022 we reported an
impairment charge of $62 million relating to the Company's Hosiery
CGU. During the fourth quarter of fiscal 2023 we reported an
impairment reversal of $41 million relating to the Hosiery CGU.
There was no impairment or reversal of impairment identified during
the fourth quarter of fiscal 2024. Impairment charges and
impairment reversals are included as adjustments in arriving at
adjusted operating income, adjusted operating margin, adjusted net
earnings, adjusted diluted EPS, and adjusted EBITDA.
Net insurance losses (gains)Net insurance gains of nil (2023 -
$77 million, 2022 - $26 million) for the fiscal year ended December
29, 2024, related to the two hurricanes which impacted the
Company’s operations in Central America in November 2020. Net
insurance gains relate to the recognition of insurance recoveries
for business interruption losses and insurance recoveries for
damaged equipment. Insurance gains relating to recoveries for
business interruption losses of nil (2023 - $74 million, 2022 -
nil), are recorded in insurance gains, and included as an
adjustment in arriving at adjusted operating income, adjusted
operating margin, adjusted net earnings, adjusted diluted EPS, and
adjusted EBITDA. Net insurance gains and losses relating mainly to
recoveries for damaged equipment, salary and benefits for idle
employees of nil, (2023 - $3 million (gain), 2022 - $26 million
(gain)), are recorded in cost of sales and included as an
adjustment in arriving at adjusted gross profit and adjusted gross
margin, adjusted operating income, adjusted operating margin,
adjusted net earnings, adjusted diluted EPS, and adjusted
EBITDA.
Impact of strategic product line initiativesIn the fourth
quarter of fiscal 2019, the Company launched a strategic initiative
to significantly reduce its imprintables product line SKU count. In
the fourth quarter of fiscal 2020 the Company expanded this
strategic initiative to include a significant reduction in its
retail product line SKU count. The objectives of this strategic
initiative include exiting all ship to-the-piece activities,
discontinuing overlapping and less productive styles and SKUs
between brands, simplifying the Company's product portfolio and
reducing complexity in its manufacturing and warehouse distribution
activities. The impact of this initiative has included inventory
write-downs to reduce the carrying value of discontinued SKUs to
liquidation values, sales return allowances for product returns
related to discontinued SKUs. The impact of strategic product line
initiatives is included as an adjustment in arriving at adjusted
gross profit and adjusted gross margin, adjusted operating income,
adjusted operating margin, adjusted net earnings, adjusted diluted
EPS, and adjusted EBITDA.
The charges related to this initiative in fiscal 2022, 2023 and
2024, were as follows:
- Fiscal 2022 includes $1 million gain related to the reversal of
a reserve relating to Company's strategic initiatives to
significantly reduce its product line SKU counts.
- Fiscal 2023 and 2024 recoveries were nil.
Gain on sale and leasebackDuring the first quarter of 2023, the
Company recognized a gain of $25 million ($15.5 million after
reflecting $9.5 million of income tax expense) on the sale and
leaseback of one of our distribution centres located in the U.S.
The impact of this gain was included as an adjustment in arriving
at adjusted operating income, adjusted operating margin, adjusted
earnings before income taxes, adjusted income tax expense, adjusted
net earnings, adjusted diluted EPS, and adjusted EBITDA.
Costs relating to proxy contest and leadership changes and
related mattersOn December 11, 2023, the Company’s then Board of
Directors (the “Previous Board”) announced the termination of the
Company’s President and Chief Executive Officer, Glenn Chamandy. On
such date, the Previous Board appointed Vince Tyra as President and
Chief Executive Officer, and Mr. Tyra took office in the first
quarter of fiscal 2024, effective on January 15, 2024. Following
the termination of Mr. Chamandy, shareholder Browning West and
others initiated a campaign and proxy contest against the Previous
Board, proposing a new slate of Directors and requesting the
reinstatement of Mr. Chamandy as President and Chief Executive
Officer. In the second quarter of 2024, on April 28, 2024, in
advance of the May 28, 2024 Annual General Meeting of Shareholders
(“Annual Meeting”), the Previous Board announced a refreshed Board
of Directors (“Refreshed Board”) that resulted in the immediate
replacement of five Directors, with two additional Directors
staying on temporarily but not standing for re-election at the
Annual Meeting. On May 23, 2024, five days prior to the Annual
Meeting, the Refreshed Board and Mr. Tyra resigned, along with Arun
Bajaj, the Company’s Executive Vice-President, Chief Human
Resources Officer (CHRO) and Legal Affairs. The Refreshed Board
appointed Browning West's nominees to the Board of Directors (the
“New Board”), effective as of that date. On May 24, 2024, the New
Board reinstated Mr. Chamandy as President and Chief Executive
Officer. On May 28, 2024, the New Board was elected by shareholders
at the Annual Meeting. During the past year, the Company incurred
significant expenses primarily at the direction of the Previous
Board and the Refreshed Board, including: (i) legal, communication,
proxy advisory, financial and other advisory fees relating to the
proxy contest and related matters and the termination and
subsequent reinstatement of Mr. Chamandy; (ii) legal, financial and
other advisory fees with respect to a review process initiated by
the Previous Board following receipt of a confidential non-binding
expression of interest to acquire the Company; (iii) special senior
management retention awards; (iv) severance and termination
benefits relating to outgoing executives; and (v) incremental
director meeting fees and insurance premiums. In addition,
subsequent to the Annual Meeting, the Corporate Governance and
Social Responsibility Committee (the "CGSRC") recommended to the
New Board, and the New Board approved, back-pay compensation for
Mr. Chamandy (who did not receive any severance payment following
his termination on December 11, 2023), relating to his
reinstatement, including the reinstatement of share-based awards
that were canceled by the Previous Board. In light of the strong
shareholder support received for its successful campaign and the
fact that the Refreshed Board resigned in advance of the Annual
Meeting, the CGSRC also recommended to the New Board, and the New
Board approved, the reimbursement of Browning West’s legal and
other advisory expenses relating to the proxy contest, in the
amount of $9.4 million in the second quarter of 2024.
The total costs relating to these non-recurring events (“Costs
relating to proxy contest and leadership changes and related
matters”) amounted to $82.7 million (2023 - $6.3 million, 2022 -
nil), for the year ended December 29, 2024, as itemized in the
table below with corresponding footnotes. Such costs are included
in selling, general and administrative expenses. The impact of the
below charges are included as adjustments in arriving at adjusted
SG&A expenses, adjusted SG&A expenses as a percentage of
net sales, adjusted operating income, adjusted operating margin,
adjusted earnings before income taxes, adjusted net earnings,
adjusted diluted EPS, and adjusted EBITDA.
|
|
Three months ended |
|
Twelve months ended |
| (in
$ millions) |
December29, 2024 |
December31, 2023 |
|
|
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory fees on shareholder matters(1) |
0.9 |
|
1.8 |
|
|
36.7 |
|
1.8 |
|
— |
|
| Severance and other
termination benefits(2) |
— |
|
— |
|
|
21.6 |
|
— |
|
— |
|
| Compensation expenses relating
to Glenn Chamandy’s termination and subsequent reinstatement as
President and Chief Executive Officer(3) |
— |
|
4.5 |
|
|
8.9 |
|
4.5 |
|
— |
|
| Incremental (recoveries) costs
relating to the Previous Board and Refreshed Board(4) |
(0.1 |
) |
— |
|
|
8.7 |
|
— |
|
— |
|
| Costs relating to assessing
external interests in acquiring the Company(5) |
— |
|
— |
|
|
3.0 |
|
— |
|
— |
|
| Special
retention awards, net of jobs credit(6) |
(0.4 |
) |
— |
|
|
3.8 |
|
— |
|
— |
|
|
Costs relating to proxy contest and leadership changes and related
matters |
0.4 |
|
6.3 |
|
|
82.7 |
|
6.3 |
|
— |
|
(1) Relates to advisory, legal and other expenses for the proxy
contest and shareholder matters. Charges incurred during fiscal
2024 of $36.7 million (2023 - $1.8 million, 2022 - nil)
include:
- $27.3 million (2023 - $1.8 million,
2022 - nil) of advisory, legal and other fees and expenses related
to the proxy contest and related matters; and
- $9.4 million of expenses (2023 - nil,
2022 - nil) for the reimbursement of advisory, legal and other fees
and expenses incurred by Browning West in relation to the proxy
contest (refer to note 22 of the consolidated annual financial
statements for the year ended December 29, 2024 for additional
information).
(2) Relates to the payout of severance and other
termination benefits to Mr. Tyra and Mr. Bajaj pursuant to existing
severance arrangements approved and made by the Refreshed Board in
the context of the proxy contest, prior to its conclusion in May
2024. The cash payouts in the second quarter of 2024 for severance
and termination benefits totaled $24.4 million, of which $15.3
million was for Mr. Tyra and $9.1 million was for Mr. Bajaj. The
respective charges included in selling, general and administrative
expenses totaled $21.6 million (of which $14.1 million was for
Mr. Tyra and $7.5 million was for Mr. Bajaj), and include $12.3
million for accelerated vesting of share-based awards as well $9.3
million in other termination benefits for these executives.
(3) Compensation expenses relating to Mr. Chamandy
include back-pay as part of his reinstatement by the New Board, and
the reinstatement of share-based awards which had been canceled by
the Previous Board. Net charges incurred during fiscal year ended
December 29, 2024 of $8.9 million (2023 - $4.5 million, 2022 -
nil), respectively, include:
- $1.7 million (2023 - nil, 2022 - nil)
for backpay and accruals for short-term incentive plan
benefits;
- nil (2023 - $9.8 million, 2022 - nil)
consisting of accrued termination benefits;
- $14.6 million of stock-based
compensation expense for past service costs related to the
reinstatement of Mr. Chamandy’s 2022 and 2023 long-term
incentive program (LTIP) grants (for which a reversal of net
compensation expense of approximately $5 million was recorded in
the fourth quarter of fiscal 2023);
- $2.4 million of stock-based
compensation expense adjustments relating to Mr. Chamandy’s
2021 LTIP share-based grant which vested in 2024; and
- The reversal of a $9.8 million accrual
for severance in the second quarter of 2024 (which had been accrued
for in the fourth quarter of 2023), as Mr. Chamandy forfeited any
termination benefit entitlement in connection with the award of
back-pay and reinstatement of canceled share-based awards as noted
above.
(4) The Company incurred $8.7 million of
incremental costs relating to the Previous Board and Refreshed
Board during fiscal 2024. These charges include $4.8 million for a
Directors and Officers run off insurance policy, $0.6 million for
special board meeting fee payments, and $3.3 million for the
increase in value of the deferred share units (DSU) liability.
(5) Relates to advisory, legal and other expenses
with respect to the announced review process initiated by the
Previous Board following receipt of a confidential non-binding
expression of interest to acquire the Company. The Company incurred
$3.0 million of expenses during fiscal 2024 related to this
matter.
(6) Stock-based compensation expenses relating to
special retention awards, granted in the first quarter of fiscal
2024, of $3.8 million for fiscal 2024, include $5.8 million of
retention awards, partially offset by $2.0 million in jobs credit.
At the grant date, these special retention awards had a total fair
value of $8.6 million. The stock-based compensation expense
relating to these awards is being recognized over the respective
vesting periods, with most of the awards originally vesting at the
end of 2024. In connection with the departure of Mr. Bajaj,
$2.5 million of these awards were fully paid out in cash to
him during the second quarter of 2024, as part of the
$9.1 million payout in note 2 above.
Adjusted net earnings and adjusted diluted EPSAdjusted net
earnings are calculated as net earnings before restructuring and
acquisition-related costs, impairment (impairment reversal) of
intangible assets, net insurance gains, gain on sale and leaseback,
costs relating to proxy contest and leadership changes and related
matters, the impact of the Company's strategic product line
initiatives, and income tax expense or recovery relating to these
items. Adjusted net earnings also excludes income taxes related to
the re-assessment of the probability of realization of previously
recognized or de-recognized deferred income tax assets, and income
taxes relating to the revaluation of deferred income tax assets and
liabilities as a result of statutory income tax rate changes in the
countries in which we operate. Adjusted diluted EPS is calculated
as adjusted net earnings divided by the diluted weighted average
number of common shares outstanding. The Company uses adjusted net
earnings and adjusted diluted EPS to measure its net earnings
performance from one period to the next, and in making decisions
regarding the ongoing operations of its business, without the
variation caused by the impacts of the items described above. The
Company excludes these items because they affect the comparability
of its net earnings and diluted EPS and could potentially distort
the analysis of net earnings trends in its business performance.
The Company believes adjusted net earnings and adjusted diluted EPS
are useful to investors because they help identify underlying
trends in our business that could otherwise be masked by certain
expenses, write-offs, charges, income or recoveries that can vary
from period to period. Excluding these items does not imply they
are non-recurring. These measures do not have any standardized
meanings prescribed by IFRS and are therefore unlikely to be
comparable to similar measures presented by other companies.
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions, except per share amounts) |
December29, 2024 |
|
December31, 2023 |
|
|
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
|
|
|
|
|
|
| Net earnings |
132.3 |
|
153.3 |
|
|
400.9 |
|
533.6 |
|
541.5 |
|
| Adjustments for: |
|
|
|
|
|
|
Restructuring and acquisition-related (recoveries) costs |
(4.3 |
) |
10.9 |
|
|
(5.3 |
) |
45.8 |
|
0.5 |
|
|
Impairment (Impairment reversal) of intangible assets, net of
write-downs |
— |
|
(40.8 |
) |
|
— |
|
(40.8 |
) |
62.3 |
|
|
Impact of strategic product line initiatives |
— |
|
— |
|
|
— |
|
— |
|
(1.0 |
) |
|
Gain on sale and leaseback |
— |
|
— |
|
|
— |
|
(25.0 |
) |
— |
|
|
Net insurance gains |
— |
|
— |
|
|
— |
|
(77.3 |
) |
(25.9 |
) |
|
Costs relating to proxy contest and leadership changes and related
matters |
0.4 |
|
6.3 |
|
|
82.7 |
|
6.3 |
|
— |
|
|
Income tax expense (recovery) relating to the above-noted
adjustments |
0.4 |
|
(0.5 |
) |
|
0.5 |
|
10.0 |
|
7.2 |
|
|
Impact of Barbados tax rate changes on the revaluation of deferred
income tax assets and liabilities |
(0.6 |
) |
— |
|
|
10.9 |
|
— |
|
— |
|
|
Income tax recovery related to the revaluation of deferred income
tax assets and liabilities(1) |
— |
|
— |
|
|
— |
|
— |
|
(9.9 |
) |
|
Adjusted net earnings |
128.2 |
|
129.2 |
|
|
489.7 |
|
452.6 |
|
574.7 |
|
|
Diluted EPS |
0.86 |
|
0.89 |
|
|
2.46 |
|
3.03 |
|
2.93 |
|
|
Adjusted diluted EPS(2) |
0.83 |
|
0.75 |
|
|
3.00 |
|
2.57 |
|
3.11 |
|
(1) Includes an income tax recovery of nil (2023 - nil, 2022 -
$9.9 million) pursuant to the recognition of previously
de-recognized (in fiscal 2018 and fiscal 2017 pursuant to the
organizational realignment plan) deferred income tax assets as a
result of a re-assessment of the probability of realization of such
deferred income tax assets.
(2) This is a non-GAAP ratio. It is calculated as adjusted net
earnings (loss) divided by the diluted weighted average number of
common shares outstanding.
Adjusted earnings before income taxes, adjusted
income tax expense, and adjusted effective income tax rateAdjusted
effective income tax rate is defined as adjusted income tax expense
divided by adjusted earnings before income taxes. Adjusted earnings
before income taxes excludes restructuring and acquisition-related
costs, impairment (impairment reversal) of intangible assets, net
insurance gains, gain on sale and leaseback, costs relating to
proxy contest and leadership changes and related matters, and the
impact of the Company's strategic product line initiatives.
Adjusted income tax expense is defined as income tax expense
excluding tax rate changes resulting in the revaluation of deferred
income tax assets and liabilities, income taxes relating to the
re-assessment of the probability of realization of previously
recognized or de-recognized deferred income tax assets, and income
tax expense relating to restructuring charges and other pretax
adjustments noted above. The Company excludes these adjustments
because they affect the comparability of its effective income tax
rate. The Company believes the adjusted effective income tax rate
provides a clearer understanding of our normalized effective tax
rate and financial performance for the current period and for
purposes of developing its annual financial budgets. The Company
believes that adjusted effective income tax rate is useful to
investors in assessing the Company's future effective income tax
rate as it identifies certain pre-tax expenses and gains and income
tax charges and recoveries which are not expected to recur on a
regular basis (in particular, non-recurring costs such as proxy
contest and leadership changes and related matters incurred in the
Company’s Canadian legal entity which do not result in tax
recoveries, and tax rate changes resulting in the revaluation of
deferred income tax assets and liabilities).
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions, or otherwise indicated) |
December29, 2024 |
|
December31, 2023 |
|
|
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
|
|
|
|
|
|
| Earnings before income
taxes |
152.0 |
|
156.9 |
|
|
514.1 |
|
564.2 |
|
566.4 |
|
| Adjustments for: |
|
|
|
|
|
|
Restructuring and acquisition-related (recoveries) costs |
(4.3 |
) |
10.9 |
|
|
(5.3 |
) |
45.8 |
|
0.5 |
|
|
Impairment (Impairment reversal) of intangible assets, net of
write-downs |
— |
|
(40.8 |
) |
|
— |
|
(40.8 |
) |
62.3 |
|
|
Impact of strategic product line initiatives |
— |
|
— |
|
|
— |
|
— |
|
(1.0 |
) |
|
Net insurance gains |
— |
|
— |
|
|
— |
|
(77.3 |
) |
(25.9 |
) |
|
Gain on sale and leaseback |
— |
|
— |
|
|
— |
|
(25.0 |
) |
— |
|
|
Costs relating to proxy contest and leadership changes and related
matters |
0.4 |
|
6.3 |
|
|
82.7 |
|
6.3 |
|
— |
|
|
Adjusted earnings before income taxes |
148.1 |
|
133.3 |
|
|
591.5 |
|
473.2 |
|
602.3 |
|
|
|
|
|
|
|
|
| Income tax expense |
19.7 |
|
3.6 |
|
|
113.2 |
|
30.6 |
|
24.9 |
|
| Adjustments for: |
|
|
|
|
|
|
Income tax expense relating to restructuring (recoveries) costs and
other adjustments above |
(0.4 |
) |
0.5 |
|
|
(0.5 |
) |
(10.0 |
) |
(7.2 |
) |
|
Income tax recovery related to the revaluation of deferred income
tax assets and liabilities |
— |
|
— |
|
|
— |
|
— |
|
9.9 |
|
|
Impact of Barbados tax rate changes on the revaluation of deferred
income tax assets and liabilities |
0.6 |
|
— |
|
|
(10.9 |
) |
— |
|
— |
|
|
Adjusted income tax expense |
19.9 |
|
4.1 |
|
|
101.8 |
|
20.6 |
|
27.6 |
|
|
Average effective income tax rate(1) |
13.0 |
% |
2.3 |
% |
|
22.0 |
% |
5.4 |
% |
4.4 |
% |
|
Adjusted effective income tax rate(2) |
13.4 |
% |
3.1 |
% |
|
17.2 |
% |
4.4 |
% |
4.6 |
% |
(1) Average effective income tax rate is calculated as income
tax expense divided by earnings before income taxes.
(2) This is a non-GAAP ratio. It is calculated as adjusted
income tax expense divided by adjusted earnings before income
taxes.
Adjusted gross profit and adjusted gross
marginAdjusted gross profit is calculated as gross profit excluding
the impact of net insurance gains in fiscal 2023, and the impact of
the Company's strategic product line initiatives. The Company uses
adjusted gross profit and adjusted gross margin to measure its
performance at the gross margin level from one period to the next,
without the variation caused by the impacts of the item described
above. The Company excludes this item because it affects the
comparability of its financial results and could potentially
distort the analysis of trends in its business performance.
Excluding this item does not imply that it is non-recurring. The
Company believes adjusted gross profit and adjusted gross margin
are useful to management and investors because they help identify
underlying trends in our business in how efficiently the Company
uses labor and materials for manufacturing goods to our customers
that could otherwise be masked by the impact of net insurance gains
in prior years. These measures do not have any standardized
meanings prescribed by IFRS and are therefore unlikely to be
comparable to similar measures presented by other companies.
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions, or otherwise indicated) |
December29, 2024 |
|
December31, 2023 |
|
|
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
|
|
|
|
|
|
| Gross profit |
253.0 |
|
236.6 |
|
|
1,003.7 |
|
880.1 |
|
992.4 |
|
| Adjustments for: |
|
|
|
|
|
|
Impact of strategic product line initiatives |
— |
|
— |
|
|
— |
|
— |
|
(1.0 |
) |
|
Net insurance gains |
— |
|
— |
|
|
— |
|
(3.1 |
) |
(25.9 |
) |
|
Adjusted gross profit |
253.0 |
|
236.6 |
|
|
1,003.7 |
|
877.0 |
|
965.5 |
|
|
|
|
|
|
|
|
|
Net sales |
821.5 |
|
782.7 |
|
|
3,270.6 |
|
3,195.9 |
|
3,240.5 |
|
| Sales
return allowance for anticipated product returns |
— |
|
— |
|
|
— |
|
— |
|
— |
|
|
Net sales excluding the allowance for anticipated product returns
related to discontinued SKUs |
821.5 |
|
782.7 |
|
|
3,270.6 |
|
3,195.9 |
|
3,240.5 |
|
|
Gross margin |
30.8 |
% |
30.2 |
% |
|
30.7 |
% |
27.5 |
% |
30.6 |
% |
|
Adjusted gross margin(1) |
30.8 |
% |
30.2 |
% |
|
30.7 |
% |
27.4 |
% |
29.8 |
% |
(1) This is a non-GAAP ratio. It is calculated
as adjusted gross profit divided by net sales excluding the sales
return allowance for anticipated product returns related to
discontinued SKUs. Net sales excluding the sales return allowance
for anticipated product returns related to discontinued SKUs is a
non-GAAP measure used in the denominator of the adjusted margin
ratios to reverse the full effect of the SKU rationalization
adjustments.
Adjusted SG&A expenses and adjusted SG&A expenses as a
percentage of salesAdjusted SG&A expenses is calculated as
selling, general and administrative expenses excluding the impact
of costs relating to proxy contest and leadership changes and
related matters. The Company uses adjusted SG&A expenses and
adjusted SG&A expenses as a percentage of net sales to measure
its performance from one period to the next, without the variation
caused by the impact of the items described above. Excluding these
items does not imply they are non-recurring. The Company believes
adjusted SG&A expenses and adjusted SG&A expenses as a
percentage of net sales are useful to investors because they help
identify underlying trends in our business that could otherwise be
masked by costs relating to the proxy contest and leadership
changes and related matters, which the Company believes are unusual
and non-recurring in nature. These measures do not have any
standardized meanings prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other
companies.
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions, or otherwise indicated) |
December29, 2024 |
|
December31, 2023 |
|
|
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
|
|
|
|
|
|
| SG&A expenses |
78.3 |
|
88.3 |
|
|
390.8 |
|
330.4 |
|
326.3 |
|
| Adjustment for: |
|
|
|
|
|
|
Costs relating to proxy contest and leadership changes and related
matters |
0.4 |
|
6.3 |
|
|
82.7 |
|
6.3 |
|
— |
|
|
Adjusted SG&A expenses |
77.9 |
|
82.0 |
|
|
308.1 |
|
324.1 |
|
326.3 |
|
|
SG&A expenses as a percentage of net sales |
9.5 |
% |
11.3 |
% |
|
11.9 |
% |
10.3 |
% |
10.1 |
% |
|
Adjusted SG&A expenses as a percentage of net sales(1) |
9.5 |
% |
10.5 |
% |
|
9.4 |
% |
10.1 |
% |
10.1 |
% |
(1) This is a non-GAAP ratio. It is calculated as adjusted
SG&A expenses divided by net sales.
Adjusted operating income and adjusted operating marginAdjusted
operating income is calculated as operating income before
restructuring and acquisition-related costs, and also excludes
impairment (impairment reversal) of intangible assets, the impact
of the Company's strategic product line initiatives, net insurance
gains, gain on sale and leaseback, and costs relating to proxy
contest and leadership changes and related matters. Management uses
adjusted operating income and adjusted operating margin to measure
its performance at the operating income level as we believe it
provides a better indication of our operating performance and
facilitates the comparison across reporting periods, without the
variation caused by the impacts of the items described above. The
Company excludes these items because they affect the comparability
of its operating results and could potentially distort the analysis
of trends in its operating income and operating margin performance.
The Company believes adjusted operating income and adjusted
operating margin are useful to investors because they help identify
underlying trends in our business in how efficiently the Company
generates profit from its primary operations that could otherwise
be masked by the impact of the items noted above that can vary from
period to period. Excluding these items does not imply they are
non-recurring. These measures do not have any standardized meanings
prescribed by IFRS and are therefore unlikely to be comparable to
similar measures presented by other companies.
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions, or otherwise indicated) |
December29, 2024 |
|
December31, 2023 |
|
|
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
|
|
|
|
|
|
| Operating income |
179.0 |
|
178.1 |
|
|
618.2 |
|
643.9 |
|
603.4 |
|
| Adjustments for: |
|
|
|
|
|
|
Restructuring and acquisition-related (recoveries) costs |
(4.3 |
) |
10.9 |
|
|
(5.3 |
) |
45.8 |
|
0.5 |
|
|
Impairment (Impairment reversal) of intangible assets, net of
write-downs |
— |
|
(40.8 |
) |
|
— |
|
(40.8 |
) |
62.3 |
|
|
Impact of strategic product line initiatives |
— |
|
— |
|
|
— |
|
— |
|
(1.0 |
) |
|
Gain on sale and leaseback |
— |
|
— |
|
|
— |
|
(25.0 |
) |
— |
|
|
Net insurance gains |
— |
|
— |
|
|
— |
|
(77.3 |
) |
(25.9 |
) |
|
Costs relating to proxy contest and leadership changes and related
matters |
0.4 |
|
6.3 |
|
|
82.7 |
|
6.3 |
|
— |
|
|
Adjusted operating income |
175.1 |
|
154.5 |
|
|
695.6 |
|
552.9 |
|
639.3 |
|
| Operating margin |
21.8 |
% |
22.8 |
% |
|
18.9 |
% |
20.1 |
% |
18.6 |
% |
|
Adjusted operating margin(1) |
21.3 |
% |
19.7 |
% |
|
21.3 |
% |
17.3 |
% |
19.7 |
% |
(1) This is a non-GAAP ratio. It is calculated
as adjusted operating income divided by net sales excluding the
sales return allowance for anticipated product
returns related to discontinued SKUs. Net sales excluding
the sales return allowance for anticipated product returns related
to discontinued SKUs is a non-GAAP measure used in the denominator
of the adjusted margin ratios to reverse the full effect of the SKU
rationalization adjustments.
Adjusted EBITDAAdjusted EBITDA is calculated as earnings before
financial expenses net, income taxes, and depreciation and
amortization, and excludes the impact of restructuring and
acquisition-related costs. Adjusted EBITDA also excludes impairment
(impairment reversal) of intangible assets, the impact of the
Company's strategic product line initiatives, net insurance gains,
gain on sale and leaseback, and costs relating to proxy contest and
leadership changes and related matters. Management uses
adjusted EBITDA, among other measures, to facilitate a comparison
of the profitability of its business on a consistent basis from
period-to-period and to provide a more complete understanding of
factors and trends affecting our business. The Company also
believes this measure is commonly used by investors and analysts to
assess profitability and the cost structure of companies within the
industry, as well as measure a company’s ability to service debt
and to meet other payment obligations, or as a common valuation
measurement. The Company excludes depreciation and amortization
expenses, which are non-cash in nature and can vary significantly
depending upon accounting methods or non-operating factors.
Excluding these items does not imply they are non-recurring. This
measure does not have any standardized meanings prescribed by IFRS
and is therefore unlikely to be comparable to similar measures
presented by other companies.
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions) |
December29, 2024 |
|
December31, 2023 |
|
|
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
|
|
|
|
|
|
| Net earnings |
132.3 |
|
153.3 |
|
|
400.9 |
|
533.6 |
|
541.5 |
|
| Restructuring and
acquisition-related (recoveries) costs |
(4.3 |
) |
10.9 |
|
|
(5.3 |
) |
45.8 |
|
0.5 |
|
| Impairment (Impairment
reversal) of intangible assets, net of write-downs |
— |
|
(40.8 |
) |
|
— |
|
(40.8 |
) |
62.3 |
|
| Impact of strategic product
line initiatives |
— |
|
— |
|
|
— |
|
— |
|
(1.0 |
) |
| Gain on sale and
leaseback |
— |
|
— |
|
|
— |
|
(25.0 |
) |
— |
|
| Net insurance gains |
— |
|
— |
|
|
— |
|
(77.3 |
) |
(25.9 |
) |
| Costs relating to proxy
contest and leadership changes and related matters |
0.4 |
|
6.3 |
|
|
82.7 |
|
6.3 |
|
— |
|
| Depreciation and
amortization |
33.3 |
|
30.8 |
|
|
138.2 |
|
121.6 |
|
124.9 |
|
| Financial expenses, net |
26.9 |
|
21.2 |
|
|
104.2 |
|
79.7 |
|
37.0 |
|
| Income
tax expense |
19.7 |
|
3.6 |
|
|
113.2 |
|
30.6 |
|
24.9 |
|
|
Adjusted EBITDA |
208.3 |
|
185.3 |
|
|
833.9 |
|
674.5 |
|
764.2 |
|
Free cash flow Free cash flow is defined as cash
flow from operating activities, less cash flow used in investing
activities excluding cash flows relating to business acquisitions.
The Company considers free cash flow to be an important indicator
of the financial strength and liquidity of its business, and it is
a key metric used by management in managing capital as it indicates
how much cash is available after capital expenditures to repay
debt, to pursue business acquisitions, and/or to redistribute to
its shareholders. Management believes that free cash flow also
provides investors with an important perspective on the cash
available to us to service debt, fund acquisitions, and pay
dividends. In addition, free cash flow is commonly used by
investors and analysts when valuing a business and its underlying
assets. This measure does not have any standardized meanings
prescribed by IFRS and is therefore unlikely to be comparable to
similar measures presented by other companies.
|
|
Three months ended |
|
Twelve months ended |
|
(in $ millions) |
December29, 2024 |
|
December31, 2023 |
|
|
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
|
|
|
|
|
|
|
| Cash flows from (used in)
operating activities |
210.5 |
|
239.1 |
|
|
501.4 |
|
546.6 |
|
413.5 |
|
| Cash flows from (used in)
investing activities |
(2.8 |
) |
(35.8 |
) |
|
(112.1 |
) |
(154.9 |
) |
(182.4 |
) |
| Adjustment for: |
|
|
|
|
|
|
|
Business (dispositions) acquisitions |
— |
|
— |
|
|
— |
|
— |
|
(33.5 |
) |
|
Free cash flow |
207.7 |
|
203.3 |
|
|
389.3 |
|
391.7 |
|
197.6 |
|
Total debt and net debtTotal debt is defined as the
total bank indebtedness, long-term debt (including any current
portion), derivative financial instrument assets and liabilities
related to the principal component of the cross-currency swap, and
lease obligations (including any current portion), and net debt is
calculated as total debt net of cash and cash equivalents. The new
adjustment in fiscal 2024 to total debt for the cross-currency swap
on the Canadian notes incurred in the fourth quarter of fiscal 2024
reflects that the Company does not have exposure to the Canadian/US
exchange rate fluctuations due to the hedge. The Company considers
total debt and net debt to be important indicators for management
and investors to assess the financial position and liquidity of the
Company, and measure its financial leverage. These measures do not
have any standardized meanings prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other
companies.
|
(in $ millions) |
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
|
|
|
|
| Long-term debt (including
current portion) |
1,535.9 |
|
985.0 |
|
930.0 |
|
| Bank indebtedness |
— |
|
— |
|
— |
|
| Derivative financial
instrument liabilities on Canadian Senior unsecured notes |
14.1 |
|
— |
|
— |
|
| Lease
obligations (including current portion) |
117.4 |
|
98.1 |
|
94.0 |
|
|
Total debt |
1,667.4 |
|
1,083.1 |
|
1,024.0 |
|
| Cash
and cash equivalents |
(98.8 |
) |
(89.6 |
) |
(150.4 |
) |
|
Net debt |
1,568.6 |
|
993.5 |
|
873.6 |
|
Net debt leverage ratioThe net debt leverage ratio
is defined as the ratio of net debt to pro-forma adjusted EBITDA
for the trailing twelve months, all of which are non-GAAP measures.
The pro-forma adjusted EBITDA for the trailing twelve months
reflects business acquisitions made during the period, as if they
had occurred at the beginning of the trailing twelve month period.
The Company has currently set a net debt leverage target ratio of
1.5 to 2.5 times pro-forma adjusted EBITDA for the trailing twelve
months (previously 1.0 to 2.0 times). The net debt leverage ratio
serves to evaluate the Company's financial leverage and is used by
management in its decisions on the Company's capital structure,
including financing strategy. The Company believes that certain
investors and analysts use the net debt leverage ratio to measure
the financial leverage of the Company, including our ability to pay
off our incurred debt. The Company's net debt leverage ratio
differs from the net debt to EBITDA ratio that is a covenant in our
loan and note agreements, and therefore the Company believes it is
a useful additional measure. This measure does not have any
standardized meanings prescribed by IFRS and is therefore unlikely
to be comparable to similar measures presented by other
companies.
|
(in $ millions, or otherwise indicated) |
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
Adjusted EBITDA for the trailing twelve months |
833.8 |
|
674.5 |
|
764.2 |
|
| Adjustment for: |
|
|
|
|
|
|
|
Business acquisitions |
— |
|
— |
|
— |
|
|
Pro-forma adjusted EBITDA for the trailing twelve months |
833.8 |
|
674.5 |
|
764.2 |
|
|
|
|
|
|
|
|
|
| Net debt |
1,568.6 |
|
993.4 |
|
873.6 |
|
| Net
debt leverage ratio(1) |
1.9 |
|
1.5 |
|
1.1 |
|
(1) The Company's net debt to EBITDA ratio for
purposes of its term loans and revolving facility was 2.0x and for
purposes of U.S. private placement notes was 2.2x at
December 29, 2024. Refer to section 8.2 of the annual
MD&A.
Return on adjusted average net assetsReturn on
adjusted average net assets (Adjusted RONA) is defined as the ratio
of return to adjusted average net assets for the last five
quarters. Return is defined as adjusted net earnings, excluding net
financial expenses and the amortization of intangible assets
(excluding software), net of income tax recoveries related thereto.
Average is computed as the sum of the five quarters divided by
five. Adjusted average net assets are defined as the sum
of average total assets, excluding average cash and cash
equivalents, average net deferred income taxes, and the average
accumulated amortization of intangible assets excluding software,
less average total current liabilities excluding the current
portion of lease obligations. Adjusted average net assets and
return are non-GAAP measures used as components of adjusted RONA.
The Company uses adjusted RONA as a performance indicator to
measure the efficiency of its invested capital. Management believes
adjusted RONA is useful to investors as a measure of performance
and the effectiveness of our use of capital. Adjusted RONA is not a
measure of financial performance under IFRS and may not be defined
and calculated by other companies in the same manner.
|
(in $ millions) |
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
Average total assets |
3,672.4 |
|
3,565.7 |
|
3,344.4 |
|
| Average cash and cash
equivalents |
(89.7 |
) |
(97.0 |
) |
(118.8 |
) |
| Average net deferred income
taxes |
(22.4 |
) |
(11.4 |
) |
(12.9 |
) |
| Average accumulated
amortization of intangible assets, excluding software |
280.0 |
|
304.7 |
|
254.9 |
|
| Average
total current liabilities, excluding the current portion of lease
obligations and debt |
(476.7 |
) |
(432.7 |
) |
(485.3 |
) |
|
Adjusted average net assets |
3,363.6 |
|
3,329.3 |
|
2,982.3 |
|
|
|
|
|
|
|
|
Twelve months ended |
| (in $
millions, or otherwise indicated) |
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
|
Adjusted net earnings |
489.7 |
|
452.6 |
|
574.7 |
|
| Financial expenses, net (nil
income taxes in all years) |
104.2 |
|
79.7 |
|
37.0 |
|
|
Amortization of intangible assets, excluding software, net (nil
income taxes in all three years) |
8.1 |
|
8.3 |
|
13.8 |
|
|
Return |
602.0 |
|
540.6 |
|
625.5 |
|
|
Return on adjusted average net assets (Adjusted RONA) |
17.9 |
% |
16.2 |
% |
21.0 |
% |
Working capitalWorking capital is a non-GAAP
financial measure and is defined as current assets less current
liabilities. Management believes that working capital, in addition
to other conventional financial measures prepared in accordance
with IFRS, provides information that is helpful to understand the
financial condition of the Company. The objective of using working
capital is to present readers with a view of the Company from
management’s perspective by interpreting the material trends and
activities that affect the short-term liquidity and financial
position of the Company, including its ability to discharge its
short-term liabilities as they come due. This measure is not
comparable to similarly titled measures used by other public
companies.
|
(in $ millions) |
December29, 2024 |
|
December31, 2023 |
|
January1, 2023 |
|
| Cash and cash equivalents |
98.8 |
|
89.6 |
|
150.4 |
|
| Trade accounts receivable |
542.4 |
|
412.5 |
|
248.8 |
|
| Inventories |
1,110.6 |
|
1,089.4 |
|
1,225.9 |
|
| Prepaid expenses, deposits and
other current assets |
107.0 |
|
96.0 |
|
101.8 |
|
| Accounts payable and accrued
liabilities |
(490.1 |
) |
(408.3 |
) |
(471.2 |
) |
| Income taxes payable |
(29.7 |
) |
(1.6 |
) |
(6.6 |
) |
| Current portion of lease
obligations |
(17.7 |
) |
(14.2 |
) |
(13.8 |
) |
| Current
portion of long-term debt |
(300.0 |
) |
(300.0 |
) |
(150.0 |
) |
|
Working capital |
1,021.3 |
|
963.4 |
|
1,085.3 |
|
Caution Concerning Forward-Looking
StatementsCertain statements included in this press
release constitute “forward-looking statements” within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995 and
Canadian securities legislation and regulations and are subject to
important risks, uncertainties, and assumptions. This
forward-looking information includes, amongst others, information
with respect to our objectives and the strategies to achieve these
objectives, as well as information with respect to our beliefs,
plans, expectations, anticipations, estimates, and intentions,
including, without limitation, our expectation with regards to net
sales and revenue growth, gross margin, SG&A expenses, jobs
credits, restructuring and acquisition-related costs, operating
margin, adjusted operating margin, adjusted EBITDA, diluted
earnings per share, adjusted diluted earnings per share, effective
income tax rate, free cash flow, return on adjusted average net
assets, net debt to adjusted EBITDA leverage ratios, capital return
and capital investments or expenditures, including our financial
outlook set forth in this press release under the section “Outlook
and update on Gildan Sustainable Growth Strategy”. Forward-looking
statements generally can be identified by the use of conditional or
forward-looking terminology such as “may”, “will”, “expect”,
“intend”, “estimate”, “project”, “assume”, “anticipate”, “plan”,
“foresee”, “believe”, or “continue”, or the negatives of these
terms or variations of them or similar terminology. We refer you to
the Company’s filings with the Canadian securities regulatory
authorities and the U.S. Securities and Exchange Commission, as
well as the risks described under the “Financial risk management”,
“Critical accounting estimates and judgments”, and “Risks and
uncertainties” sections of our most recent Management’s Discussion
and Analysis for a discussion of the various factors that may
affect the Company’s future results. Material factors and
assumptions that were applied in drawing a conclusion or making a
forecast or projection are also set out throughout such document
and this press release, including certain assumptions relating to
the financial outlook described in this press release under the
section “Outlook and update on Gildan Sustainable Growth
Strategy”.
Forward-looking information is inherently uncertain and the
results or events predicted in such forward-looking information may
differ materially from actual results or events. Material factors,
which could cause actual results or events to differ materially
from a conclusion, forecast, or projection in such forward-looking
information, include, but are not limited to:
- changes in general economic, financial or geopolitical
conditions globally or in one or more of the markets we serve;
- our ability to implement our growth strategies and plans,
including our ability to bring projected capacity expansion
online;
- the intensity of competitive activity and our ability to
compete effectively;
- our reliance on a small number of significant customers,
including our largest distributor;
- the fact that our customers do not commit to minimum quantity
purchases;
- our ability to anticipate, identify, or react to changes in
consumer preferences and trends;
- our ability to manage production and inventory levels
effectively in relation to changes in customer demand;
- fluctuations and volatility in the prices of raw materials and
energy related inputs, from current levels, used to manufacture and
transport our products;
- our reliance on key suppliers and our ability to maintain an
uninterrupted supply of raw materials, intermediate materials, and
finished goods;
- the impact of climate, political, social, and economic risks,
natural disasters, epidemics, pandemics and endemics, in the
countries in which we operate or sell to, or from which we source
production;
- disruption to manufacturing and distribution activities due to
such factors as operational issues, disruptions in transportation
logistic functions, labour disruptions, political or social
instability, weather-related events, natural disasters, epidemics
and pandemics, and other unforeseen adverse events;
- compliance with applicable trade, competition, taxation,
environmental, health and safety, product liability, employment,
patent and trademark, corporate and securities, licensing and
permits, data privacy, bankruptcy, anti-corruption, and other laws
and regulations in the jurisdictions in which we operate;
- the imposition of trade remedies, compliance with or changes to
duties and tariffs, international trade legislation, bilateral and
multilateral trade agreements and trade preference programs that
the Company is currently relying on in conducting its manufacturing
operations or the application of safeguards thereunder;
- elimination of government subsidies and credits that we
currently benefit from, and the non-realization of anticipated new
subsidies and credits;
- the impact, including broader economic impacts, of the proposed
tariffs that were recently announced by the U.S. federal government
and of any retaliation measures that may be announced by other
governments, or the imposition of further restrictions or
prohibitions on the export or import of goods between
countries;
- factors or circumstances that could increase our effective
income tax rate, including the outcome of any tax audits or changes
to applicable tax laws or treaties;
- changes to and failure to comply with consumer product safety
laws and regulations;
- changes in our relationship with our employees or changes to
domestic and foreign employment laws and regulations;
- our reliance on key management and our ability to attract
and/or retain key personnel;
- negative publicity as a result of actual, alleged, or perceived
violations of human rights, labour and environmental laws or
international labour standards, or unethical labour or other
business practices by the Company or one of its third-party
contractors;
- our ability to protect our intellectual property rights;
- operational problems with our information systems or those of
our service providers as a result of system failures, viruses,
security and cyber security breaches, disasters, and disruptions
due to system upgrades or the integration of systems;
- an actual or perceived breach of data security;
- rapid developments in artificial intelligence;
- our ability to successfully integrate acquisitions and realize
expected benefits and synergies;
- changes in accounting policies and estimates; and
- exposure to risks arising from financial instruments, including
credit risk on trade accounts receivables and other financial
instruments, liquidity risk, foreign currency risk, and interest
rate risk, as well as risks arising from commodity prices.
These factors may cause the Company’s actual performance and
financial results in future periods to differ materially from any
estimates or projections of future performance or results expressed
or implied by such forward-looking statements. Forward-looking
statements do not take into account the effect that transactions or
non-recurring or other special items announced or occurring after
the statements are made may have on the Company’s business. For
example, they do not include the effect of business dispositions,
acquisitions, other business transactions, asset write-downs, asset
impairment losses, or other charges announced or occurring after
forward-looking statements are made. The financial impact of such
transactions and non-recurring and other special items can be
complex and depends on the facts particular to each of them.
There can be no assurance that the expectations represented by
our forward-looking statements will prove to be correct. The
purpose of the forward-looking statements is to provide the reader
with a description of management’s expectations regarding the
Company’s future financial performance and may not be appropriate
for other purposes. Furthermore, unless otherwise stated, the
forward-looking statements contained in this press release are made
as of the date of this press release, and we do not undertake any
obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information,
future events, or otherwise unless required by applicable
legislation or regulation. The forward-looking statements contained
in this press release are expressly qualified by this cautionary
statement.
About GildanGildan is a leading manufacturer of
everyday basic apparel. The Company’s product offering includes
activewear, underwear and socks, sold to a broad range of
customers, including wholesale distributors, screenprinters or
embellishers, as well as to retailers that sell to consumers
through their physical stores and/or e-commerce platforms and to
global lifestyle brand companies. The Company markets its products
in North America, Europe, Asia Pacific, and Latin America, under a
diversified portfolio of Company-owned brands including Gildan®,
American Apparel®, Comfort Colors®, GOLDTOE®, and Peds®, and under
an exclusive licensing agreement for the printwear channel for
Champion®.
Gildan owns and operates vertically integrated, large-scale
manufacturing facilities which are primarily located in Central
America, the Caribbean, North America, and Bangladesh. Gildan
operates with a strong commitment to industry-leading labour,
environmental and governance practices throughout its supply chain
in accordance with its comprehensive ESG program embedded in the
Company's long-term business strategy. More information about the
Company and its ESG practices and initiatives can be found at
www.gildancorp.com.
|
Investor inquiries:Jessy Hayem, CFA Senior
Vice-President, Head of Investor Relations and Global
Communications (514) 744-8511 jhayem@gildan.com |
Media inquiries:Genevieve GosselinDirector, Global
Communications and Corporate Marketing(514)
343-8814communications@gildan.com |
|
GILDAN ACTIVEWEAR INC.CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION(in thousands of U.S.
dollars) - unaudited |
|
|
December29, 2024 |
|
|
December31, 2023 |
|
| Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
98,799 |
|
|
$ |
89,642 |
|
|
Trade accounts receivable |
|
542,359 |
|
|
|
412,498 |
|
|
Inventories |
|
1,110,562 |
|
|
|
1,089,441 |
|
|
Prepaid expenses, deposits, and other current assets |
|
106,964 |
|
|
|
95,955 |
|
|
Total current assets |
|
1,858,684 |
|
|
|
1,687,536 |
|
| Non-current assets: |
|
|
|
|
Property, plant and equipment |
|
1,173,240 |
|
|
|
1,174,515 |
|
|
Right-of-use assets |
|
95,568 |
|
|
|
81,447 |
|
|
Intangible assets |
|
253,319 |
|
|
|
261,419 |
|
|
Goodwill |
|
271,677 |
|
|
|
271,677 |
|
|
Deferred income taxes |
|
21,800 |
|
|
|
23,971 |
|
|
Other non-current assets |
|
40,834 |
|
|
|
14,308 |
|
| Total
non-current assets |
|
1,856,438 |
|
|
|
1,827,337 |
|
| Total
assets |
$ |
3,715,122 |
|
|
$ |
3,514,873 |
|
| Current liabilities: |
|
|
|
|
Accounts payable and accrued liabilities |
$ |
490,073 |
|
|
$ |
408,294 |
|
|
Income taxes payable |
|
29,668 |
|
|
|
1,635 |
|
|
Current portion of lease obligations |
|
17,749 |
|
|
|
14,161 |
|
|
Current portion of long term debt |
|
300,000 |
|
|
|
300,000 |
|
| Total
current liabilities |
|
837,490 |
|
|
|
724,090 |
|
| Non-current liabilities: |
|
|
|
|
Long-term debt |
|
1,235,870 |
|
|
|
685,000 |
|
|
Lease obligations |
|
99,671 |
|
|
|
83,900 |
|
|
Deferred income taxes |
|
28,630 |
|
|
|
18,118 |
|
|
Other non-current liabilities |
|
56,810 |
|
|
|
46,308 |
|
| Total
non-current liabilities |
|
1,420,981 |
|
|
|
833,326 |
|
| Total
liabilities |
|
2,258,471 |
|
|
|
1,557,416 |
|
| Equity: |
|
|
|
|
Share capital |
|
268,557 |
|
|
|
271,213 |
|
|
Contributed surplus |
|
69,920 |
|
|
|
61,363 |
|
|
Retained earnings |
|
1,118,201 |
|
|
|
1,611,231 |
|
|
Accumulated other comprehensive (loss) income |
|
(27 |
) |
|
|
13,650 |
|
| Total
equity attributable to shareholders of the Company |
|
1,456,651 |
|
|
|
1,957,457 |
|
| Total
liabilities and equity |
$ |
3,715,122 |
|
|
$ |
3,514,873 |
|
|
GILDAN ACTIVEWEAR INC.CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME(in
thousands of U.S. dollars, except per share data) -
unaudited |
|
|
Three months ended |
|
|
Twelve months ended |
|
|
|
December29, 2024 |
|
|
December31, 2023 |
|
|
December29, 2024 |
|
|
December31, 2023 |
|
|
Net sales |
$ |
821,520 |
|
|
$ |
782,709 |
|
|
$ |
3,270,590 |
|
|
$ |
3,195,911 |
|
| Cost of
sales |
|
568,533 |
|
|
|
546,151 |
|
|
|
2,266,911 |
|
|
|
2,315,857 |
|
| Gross profit |
|
252,987 |
|
|
|
236,558 |
|
|
|
1,003,679 |
|
|
|
880,054 |
|
| Selling, general and
administrative expenses |
|
78,296 |
|
|
|
88,269 |
|
|
|
390,769 |
|
|
|
330,391 |
|
| Gain on sale and
leaseback |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,010 |
) |
| Net insurance gains |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(74,172 |
) |
| Restructuring and
acquisition-related (recoveries) costs |
|
(4,291 |
) |
|
|
10,912 |
|
|
|
(5,329 |
) |
|
|
45,762 |
|
|
Impairment (Impairment reversal) of intangible assets |
|
— |
|
|
|
(40,770 |
) |
|
|
— |
|
|
|
(40,770 |
) |
| Operating income |
|
178,982 |
|
|
|
178,147 |
|
|
|
618,239 |
|
|
|
643,853 |
|
|
Financial expenses, net |
|
26,939 |
|
|
|
21,239 |
|
|
|
104,154 |
|
|
|
79,670 |
|
| Earnings before income
taxes |
|
152,043 |
|
|
|
156,908 |
|
|
|
514,085 |
|
|
|
564,183 |
|
| Income
tax expense |
|
19,725 |
|
|
|
3,600 |
|
|
|
113,220 |
|
|
|
30,603 |
|
| Net earnings |
|
132,318 |
|
|
|
153,308 |
|
|
|
400,865 |
|
|
|
533,580 |
|
| Other comprehensive (loss)
income, net of related income taxes: |
|
|
|
|
|
|
|
|
Cash flow hedges |
|
(955 |
) |
|
|
(15,106 |
) |
|
|
(13,677 |
) |
|
|
3,805 |
|
|
Actuarial (loss) gain on employee benefit obligations |
|
(817 |
) |
|
|
1,717 |
|
|
|
(817 |
) |
|
|
1,717 |
|
|
|
|
(1,772 |
) |
|
|
(13,389 |
) |
|
|
(14,494 |
) |
|
|
5,522 |
|
|
Comprehensive income |
$ |
130,546 |
|
|
$ |
139,919 |
|
|
$ |
386,371 |
|
|
$ |
539,102 |
|
| Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.86 |
|
|
$ |
0.89 |
|
|
$ |
2.46 |
|
|
$ |
3.03 |
|
|
Diluted |
$ |
0.86 |
|
|
$ |
0.89 |
|
|
$ |
2.46 |
|
|
$ |
3.03 |
|
|
GILDAN ACTIVEWEAR INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(in thousands of U.S. dollars) -
unaudited |
|
|
Three months ended |
|
|
Twelve months ended |
|
|
|
December29, 2024 |
|
|
December31, 2023 |
|
|
December29, 2024 |
|
|
December31, 2023 |
|
| Cash flows from (used in) operating activities: |
|
|
|
|
|
|
|
|
Net earnings |
$ |
132,318 |
|
|
$ |
153,308 |
|
|
$ |
400,865 |
|
|
$ |
533,580 |
|
|
Adjustments for: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
33,292 |
|
|
|
30,783 |
|
|
|
138,202 |
|
|
|
121,644 |
|
|
Non-cash restructuring (recoveries) costs related to property,
plant and equipment, right-of-use assets, and computer
software |
|
(5,437 |
) |
|
|
10,135 |
|
|
|
(10,948 |
) |
|
|
18,142 |
|
|
Impairment (Impairment reversal) of intangible assets |
|
— |
|
|
|
(40,770 |
) |
|
|
— |
|
|
|
(40,770 |
) |
|
Cash settled share-based awards in connection with outgoing
executives' termination benefits |
|
— |
|
|
|
— |
|
|
|
(15,396 |
) |
|
|
— |
|
|
(Gain) Loss on disposal of property, plant and equipment (PP&E)
and right-of-use assets |
|
(188 |
) |
|
|
583 |
|
|
|
(212 |
) |
|
|
(24,584 |
) |
|
Share-based compensation |
|
12,911 |
|
|
|
4,110 |
|
|
|
64,529 |
|
|
|
26,957 |
|
|
Deferred income taxes |
|
(2,246 |
) |
|
|
(3,242 |
) |
|
|
12,665 |
|
|
|
10,147 |
|
|
Other |
|
(14,943 |
) |
|
|
(8,444 |
) |
|
|
(22,396 |
) |
|
|
(14,042 |
) |
|
Changes in non-cash working capital balances |
|
54,805 |
|
|
|
92,598 |
|
|
|
(65,921 |
) |
|
|
(84,468 |
) |
| Cash flows (used in) from
operating activities |
|
210,512 |
|
|
|
239,061 |
|
|
|
501,388 |
|
|
|
546,606 |
|
| |
|
|
|
|
|
|
|
| Cash flows from (used in) investing activities: |
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
(39,280 |
) |
|
|
(34,676 |
) |
|
|
(145,332 |
) |
|
|
(203,289 |
) |
|
Purchase of intangible assets |
|
(1,284 |
) |
|
|
(935 |
) |
|
|
(5,020 |
) |
|
|
(4,720 |
) |
|
Proceeds from sale and leaseback, disposal of assets held for sale
and other disposals of PP&E |
|
37,784 |
|
|
|
(160 |
) |
|
|
38,236 |
|
|
|
53,151 |
|
| Cash flows from (used in)
investing activities |
|
(2,780 |
) |
|
|
(35,771 |
) |
|
|
(112,116 |
) |
|
|
(154,858 |
) |
| |
|
|
|
|
|
|
|
| Cash flows from (used in) financing activities: |
|
|
|
|
|
|
|
|
Decrease in amounts drawn under revolving long-term bank credit
facility |
|
(429,000 |
) |
|
|
(40,000 |
) |
|
|
(235,000 |
) |
|
|
(95,000 |
) |
|
Proceeds from term loan |
|
— |
|
|
|
— |
|
|
|
300,000 |
|
|
|
— |
|
|
Payment of notes |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(150,000 |
) |
|
Proceeds from issuance of Senior unsecured notes |
|
500,000 |
|
|
|
— |
|
|
|
500,000 |
|
|
|
— |
|
|
Proceeds from delayed draw term loan |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
300,000 |
|
|
Payment of lease obligations |
|
(4,523 |
) |
|
|
(4,465 |
) |
|
|
(15,244 |
) |
|
|
(24,894 |
) |
|
Dividends paid |
|
(31,374 |
) |
|
|
(31,890 |
) |
|
|
(133,469 |
) |
|
|
(131,797 |
) |
|
Proceeds from the issuance of shares |
|
370 |
|
|
|
42,977 |
|
|
|
6,865 |
|
|
|
55,086 |
|
|
Repurchase and cancellation of shares |
|
(214,876 |
) |
|
|
(172,574 |
) |
|
|
(755,608 |
) |
|
|
(360,479 |
) |
|
Share repurchases for settlement of non-Treasury RSUs |
|
(5,690 |
) |
|
|
(6,673 |
) |
|
|
(27,693 |
) |
|
|
(26,228 |
) |
|
Withholding taxes paid pursuant to the settlement of non-Treasury
RSUs |
|
(1,632 |
) |
|
|
(3,809 |
) |
|
|
(19,202 |
) |
|
|
(19,470 |
) |
| Cash flows from (used in) financing activities |
|
(186,725 |
) |
|
|
(216,434 |
) |
|
|
(379,351 |
) |
|
|
(452,782 |
) |
|
Effect of exchange rate changes on cash and cash equivalents
denominated in foreign currencies |
|
(688 |
) |
|
|
281 |
|
|
|
(764 |
) |
|
|
259 |
|
| Net increase (decrease) in
cash and cash equivalents during the period |
|
20,319 |
|
|
|
(12,863 |
) |
|
|
9,157 |
|
|
|
(60,775 |
) |
| Cash and cash
equivalents, beginning of period |
|
78,480 |
|
|
|
102,505 |
|
|
|
89,642 |
|
|
|
150,417 |
|
| Cash and cash
equivalents, end of period |
$ |
98,799 |
|
|
$ |
89,642 |
|
|
$ |
98,799 |
|
|
$ |
89,642 |
|
Grafico Azioni Gildan Activewear (NYSE:GIL)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Gildan Activewear (NYSE:GIL)
Storico
Da Feb 2024 a Feb 2025
