Canadian Manufacturing

Gildan Activewear cuts 2019 guidance on weaker third quarter results

The Montreal-based company is cutting its full-year guidance to reflect a sales shortfall about US$50 million in the third quarter

October 18, 2019  The Canadian Press

MONTREAL—Gildan Activewear Inc. has cut it 2019 guidance after warning that its third-quarter results will be lower on weaker demand for imprintable apparel in North America and internationally.

The low-cost producer says it expects to report Oct. 31 that earnings will decrease about 7% to 51 cents US per share for the period ended Sept. 29 and about 53 cents on an adjusted basis.

Sales are expected to be down 2% to about US$740 million, including US$620 million of active wear sales and US$120 million from hosiery and underwear sales.

The Montreal-based company said on Aug. 1 that its adjusted EPS would be flat on about 5% sales growth.

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As a result of the revised guidance, it is cutting its full-year guidance to reflect a sales shortfall about US$50 million in the third quarter and continued weakness in the fourth quarter that will cut sales by about US$70 million. Distributor inventory reductions should reduce sales by about US$100 million.

Consequently, it is now expecting 2019 sales to be down low single digits from 2018 and diluted EPS to be US$1.50 to $1.55 and adjusted EPS of between $1.65 and $1.70 per share.