Promotional apparel supplier Gildan Activewear, Montreal, announced Thursday that its net earnings for the fourth quarter dropped 14.6 percent, with $48.5 million in 2011 versus $56.8 million in 2010. The company said the drop in sales was expected, and projected further losses in the first quarter of 2012 before income increases later in that year.
In an earnings call yesterday, Laurence Sellyn, chief financial officer for Gildan Activewear, stated, "We are forecasting a loss of approximately 40 cents per share in the first quarter of fiscal 2012, which will be only the second quarterly loss in our history as a public company, followed by an anticipated gradual strengthening in our results during the balance of the year due to assumed significantly lower cotton cost in the second half of the fiscal year as well as increased manufacturing efficiencies."
The company said the decline was anticipated and consistent with its expectations laid out in a prior earnings report. Drastic increases in the price of cotton earlier this year, costs of corporate restructuring in part related to the acquisition of Gold Toe Moretz in April, and the absence of a 2010 cotton subsidy were cited as reasons for the drop.
Despite a decrease in quarterly earnings, Gildan Activewear reported that net sales in the same quarter jumped 30 percent to $481.8 million, up from $368.9 million for the same quarter last year. Sales of activewear and underwear were up 20 percent, while sales of socks, bolstered by the Gold Toe Moretz purchase, were up 83.6 percent.
Net sales for the full fiscal year 2011 were $1.7 billion, up 31.6 percent from 2010's sales of $1.3 billion. Full year income was up 21 percent, $239.9 million in 2011 over $198.2 million in 2010.
Looking forward to 2012, Sellyn expects a first quarter loss as the company continues to offload product created when cotton was selling at a record $2 a pound. With cotton prices lower now and expected to remain so for the immediate future, and assuming sales remain consistent, Gildan Activewear projects earnings to increase gradually in the second half of the year.
- Companies:
- Broder Bros.

Kyle A. Richardson is the editorial director of Promo Marketing. He joined the company in 2006 brings more than a decade of publishing, marketing and media experience to the magazine. If you see him, buy him a drink.





