Gildan Activewear cut its full-year revenue and earnings forecasts after consumer demand weakened and distributors and retailers reduced reorders. The revised outlook came with third-quarter sales of $1.47 billion, below both the company’s guidance and analysts’ expectations, despite a sharp increase in net income.
The company now expects full-year revenue of $5.4 billion to $5.5 billion, down from its previous forecast of $6 billion to $6.2 billion. Analysts polled by FactSet had expected $5.93 billion. Gildan also lowered its adjusted earnings forecast to $3.70 to $3.80 a share, from $4.65 to $4.75; analysts had expected $4.56 a share.
Gildan said macroeconomic conditions had deteriorated since the end of July. High interest rates and persistent inflation in household essentials have dampened shoppers’ appetite for everyday basics, the company said, prompting wholesale distributors and retailers to trim reorders as they manage inventories.
For the third quarter, net income rose to $259.4 million, or $1.40 a share, from $120.2 million, or 80 cents a share, a year earlier. Adjusted earnings were $1.54 a share, short of FactSet analysts’ $1.57 estimate.
Net sales climbed 61% to $1.47 billion, largely reflecting the contribution from Gildan’s acquisition of HanesBrands. The result fell short of the company’s $1.65 billion guidance and analysts’ $1.62 billion estimate. Gildan cited lower volumes amid difficult macroeconomic conditions and lower net selling prices.
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