Gildan Activewear Announces Record Third-Quarter Financial Figures
Gildan Activewear, Montreal, released its Q3 financial results last month, showing record third-quarter sales of $802 million (up 33% over last year), record GAAP diluted EPS of $0.95 (up 167% over 2020) and record third-quarter free cash flow of $232 million.
“Our record performance for the third quarter was driven by the improved economics of our business, underpinned by our Back to Basics model, the operational excellence of our team and the ongoing recovery in demand,w which drove sales volumes which are now above pre-pandemic levels,” Gildan president and CEO Glenn J. Chamandy said in a press release. “Further, I feel confident that our team will continue to navigate through the tight supply chain environment, manage inflationary pressures and deliver results for our shareholders as we continue to move forward.”
Strong gross margin expansion drove operating margin of 25.1%, and adjusted operating margin of 21.5%, which was up approximately 930 basic points versus last year, and 500 basic points compared to the third quarter of 2019. Sales above pre-pandemic levels, combined with a stronger margin profile, drove record earnings for the quarter with GAAP cash flow of $232 million, also a record for the fourth-quarter, bringing Gildan’s year-to-date total to $478 million.
Following the company’s announcement of the restart of its normal course issuer bid program in August, Gildan repurchased more than 3.3 million common shares at a total cost of approximately $127 million during the quarter. Nonetheless, given the significant free cash flow generation in the quarter, Gildan’s net debt position declined to $287 million, reducing its net debt to adjusted EBITDA ratio to 0.4 at the end of the quarter, leaving it. with strong ongoing return of capital capability.