Gildan's Q4 Earnings Down Nearly 15%, Shares Drop 30%
According to a Financial Post article, "distributors, which include Trevose, Pennsylvania-based Broder Bros Co., have been selling batches of clothing from manufacturers to screenprinters without replenishing their stock because they foresee lower prices ahead. That's resulted in higher inventories at the factory level and discounting by producers such as Gildan."
"To balance the situation and restore rate stability for its customers, Gildan is cutting the gross selling price to its U.S. wholesale distributors effective Dec.5. And it is applying the price cut to existing distributor inventories as well," the article continued.
Following Thursday's press release and earnings call, Gildan Activewear's stock dropped more than 30 percent, from $23.88 at the close of trading Wednesday to a 52-week low of $16.32. As of noon Friday, the company's stock on the NYSE was trading at $16.82.