Q2 2024 Gildan Activewear Inc Earnings Call Transcript
Key Points
- Gildan Activewear Inc (GIL) reported Q2 sales of $862 million, up 3% year-over-year, driven by strong performance in activewear.
- The company reconfirmed its full-year 2024 guidance and provided a positive three-year outlook, expecting mid-single-digit revenue growth and mid-teen EPS growth from 2025 to 2027.
- Gross margin improved significantly to 30.4% from 25.8% in the prior year, primarily due to lower raw material and manufacturing input costs.
- Gildan Activewear Inc (GIL) resumed share repurchases, buying back approximately 3 million shares and returning $182 million in capital to shareholders in Q2.
- The company continues to see strong market share gains in key categories like fleece and ring spun products, supported by positive market response to new product innovations.
- Hosiery and underwear sales were down 16% year-over-year, mainly due to the phase-out of the Under Armour business and broader market weakness in innerwear.
- SG&A expenses included significant charges related to the proxy contest, totaling $57 million in the quarter.
- The company's adjusted effective income tax rate increased significantly to 27% in Q2, compared to 4.8% last year, due to the retroactive enactment of global minimum tax in Canada and Barbados.
- Cash flow from operating activities decreased to $140 million from $182 million in the prior year, impacted by a $40 million cash outflow from the proxy contest.
- The macroeconomic backdrop remains mixed globally, driving a generally cautious consumer spending outlook, which could impact future performance.
Ladies and gentlemen, thank you for standing by. And welcome to the Q2 2024 Gildan Activewear earnings conference call. Please be advised that today's conference is being recorded. (Operator Instructions)
I would now like to hand the conference over to Jesse Hayem, Vice President, Head of Investor Relations. Please go ahead.
Thank you, Jeannie. Good morning, everyone. Earlier we issued a press release announcing our results for the second quarter of 2024, along with our interim shareholder report containing management's discussion and analysis as well as consolidated financial statements. These documents are expected to be filed with the Canadian Securities and Regulatory Authorities and the US Securities Commission today, and they'll also be available on our corporate website.
Joining me on the call today are Glenn Chamandy, President and CEO of Gildan; Rhod Harries, Executive Vice President and Chief Financial and Administrative Officer; and Chuck Ward,
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