How Does Gildan Activewear Inc’s (TSE:GIL) Earnings Growth Stack Up Against Industry Performance?
Understanding Gildan Activewear Inc’s (TSX:GIL) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Gildan Activewear is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. Check out our latest analysis for Gildan Activewear
How Well Did GIL Perform?
For the most up-to-date info, I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to assess many different companies in a uniform manner using the most relevant data points. For Gildan Activewear, its most recent bottom-line (trailing twelve month) is US$381.68M, which, in comparison to the previous year’s level, has increased by 12.25%. Since these figures may be somewhat short-term thinking, I’ve created an annualized five-year value for Gildan Activewear’s net income, which stands at US$280.75M This means on average, Gildan Activewear has been able to gradually raise its net income over the past few years as well.
What’s enabled this growth? Well, let’s take a look at whether it is merely owing to an industry uplift, or if Gildan Activewear has experienced some company-specific growth. Over the last few years, Gildan Activewear expanded its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Eyeballing growth from a sector-level, the Canadian luxury industry has been growing its average earnings by double-digit 44.16% over the previous twelve months, and 11.55% over the past five. This means any uplift the industry is profiting from, Gildan Activewear has not been able to leverage it as much as its average peer.
What does this mean?
Gildan Activewear’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Gildan Activewear gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Gildan Activewear to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for GIL’s future growth? Take a look at our free research report of analyst consensus for GIL’s outlook.
2. Financial Health: Is GIL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 01 October 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
