Gildan Activewear reports EPS in-line, beats on revs; guides FY18 EPS below consensus; co also is increasing quarterly dividend to $0.112/share from $0.0935/share
- Reports Q4 (Dec) earnings of $0.31 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.31; revenues rose 11.2% year/year to $653.7 mln vs the $636.62 mln Capital IQ Consensus.
- Sales growth driven primarily by a strong finish in Printwear, where sales grew 27.6% in the quarter or 22.5% on an organic basis
- Consolidated gross margin in the fourth quarter increased 40 basis points to 27.1% compared to the prior year quarter. The increase was mainly due to higher net selling prices and favourable product mix in Printwear, partly offset by unfavourable product mix in Branded Apparel, higher raw material costs, and the impact of additional manufacturing expenses of approximately $6 million, or 95 basis points of gross margin, resulting from temporary production interruptions related to the recent election in Honduras.
- Co issues downside guidance for FY18, sees EPS of $1.80-1.90, excluding non-recurring items, vs. $1.90 Capital IQ Consensus Estimate.
- Adjusted EBITDA for 2018 is expected to be in the range of $595 to $620 million. The Company is also projecting to generate free cash flow for 2018 of approximately $400 million.
- Co states, "Net sales growth in 2018 assumes unit volume growth of imprintables in North America and double-digit volume growth in international markets, favourable product mix due to projected continued strong growth of fashion and performance basics from our American Apparel, Anvil, and Comfort Colors brands, as well as from new product introductions, including The Gildan Hammer line within the Gildan fashion basics collection. American Apparel which was acquired February 8, 2017 is expected to contribute net sales of approximately $100 million in 2018, up from approximately $50 million in 2017. Projected sales growth in 2018 also reflects higher net selling prices, effected to offset in part rising raw material and input costs, as well as favourable foreign exchange impacts...Adjusted operating margin for 2018 is expected to be slightly higher than 2017. The Company is projecting to incur restructuring and acquisition-related costs of approximately $15 to $20 million in 2018."