Stock Monitor: Oxford Industries Post Earnings Reporting
LONDON, UK / ACCESSWIRE / April 6, 2018 / Active-Investors.com has just released a free earnings report on Gildan Activewear Inc. (NYSE: GIL) ("Gildan"). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=GIL. Gildan reported its fourth quarter fiscal 2017 operating and financial results on February 22, 2018. The apparel maker's quarterly earnings were in-line with market estimates. The Company also initiated guidance for FY18. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Earnings Highlights and Summary
Gildan's consolidated net sales of $653.7 million for Q4 2017 advanced 11.2% compared to sales of $587.9 million in Q4 2016 and reflected a sales increase of 27.6% in the Printwear segment, including the impact of the acquisition of American Apparel. The Company's reported numbers beat analysts' estimates by $17.95 million.
During Q4 2017, Gildan's consolidated gross margin increased 40 basis points to 27.1% versus the prior year's comparable quarter. The increase was mainly due to higher net selling prices and favorable product mix in Printwear. The Company's consolidated selling, general, and administrative (SG&A) expenses as a percentage of sales were 15.9% in the reported quarter, up from 14.8% in the prior year's same quarter, primarily due to the impact of the American Apparel acquisition, lower fixed cost absorption in Branded Apparel, and higher distribution and e-commerce expenses.
Gildan's consolidated operating margin and adjusted operating margin in Q4 2017 were 9.5% and 11.2%, respectively, down from consolidated operating margin and adjusted operating margin of 11.9% in Q4 2016.
For Q4 2017, Gildan's net earnings totaled $54.9 million, or $0.25 per diluted share, compared to net earnings of $74.3 million, or $0.32 per share, for Q4 2016. Excluding after-tax restructuring and acquisition-related costs of $12.7 million in the reported quarter and $0.2 million in the prior year's corresponding quarter, the Company reported adjusted net earnings of $67.6 million, or $0.31 per diluted share, for Q4 2017, down from $74.5 million, or $0.32 per diluted share, in Q4 2016. The decline in adjusted diluted earnings per share (EPS) versus the prior year was primarily due to the expected non-recurrence of the income tax recovery in Q4 2016. Gildan's earnings met Wall Street's estimates of $0.31 per share.
Gildan's consolidated net sales for full-year 2017 were $2.75 billion up 6.4% compared to sales of $2.59 billion in FY16.
For FY17, Gildan's net earnings were $362.3 million, or $1.61 per diluted share, compared to $346.6 million, or $1.47 per diluted share, for FY16. Before reflecting after-tax restructuring and acquisition-related costs in both years, adjusted net earnings were $386.9 million, or $1.72 per share, for FY17 compared to $356.3 million, or $1.51 per share, in FY16.
Segmented Operating Results
During Q4 2017, Gildan's Printwear sales jumped 27.6% to $415.6 million from $325.8 million in Q4 2016, primarily due to strong unit sales volume growth in both domestic and international markets, the benefit of favorable product mix, a $16.6 million sales contribution from American Apparel, and higher net selling prices. Excluding the impact of the American Apparel acquisition, the segment's sales in the reported quarter increased 22.5% organically.
Operating income in Printwear totaled $82.8 million for Q4 2017, up 20.7% compared to $68.6 million in Q4 2016 driven by the increase in sales. The segment's operating margins were 19.9% in the reported quarter, down 110 basis points compared to the year-ago same period, primarily due to higher raw material costs, expenses related to unanticipated production shutdowns as well as increased SG&A expenses, higher distribution costs, and expenses related to the further development of the Company's e-commerce infrastructure.
For Q4 2017, Gildan's net sales for the Branded Apparel segment were $238.1 million, down 9.2% from $262.1 million in Q4 2016 mainly due to lower unit sales volumes of socks and activewear, unfavorable product mix driven by a lower proportion of sales of higher-priced socks and activewear, and the impact of the planned exit of certain private label programs.
For the reported quarter, operating income in Branded Apparel unit was $16.8 million, down from $24.0 million in the year-ago same period. The segment's operating margins for the reported quarter were 7.1% compared to 9.1% in the prior year's comparable quarter.
During Q4 2017, Gildan generated strong free cash flow of $165.7 million which contributed to another record year for free cash flow, totaling $519.2 million for FY17, up 30.3% over the prior year. Pursuant to its normal course issuer bid (NCIB) program, the Company repurchased 1.7 million common shares at a total cost of $52.1 million during Q4 2017 and completed repurchases of 11.5 million common shares for FY17 at a total cost of $328.6 million. Gildan's net debt at the end of 2017 amounted to $577.2 million and the Company's leverage ratio was 1.0 times net debt to adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) for 2017.
Gildan initiated guidance for FY18, projecting adjusted earnings in the range of $1.80 to $1.90 per diluted share, which at the mid-point of the guidance range represents growth of approximately 7.5% over FY17, on projected net sales growth in the low to mid-single-digit range. The Company's adjusted EBITDA for FY18 is expected to be in the range of $595 million to $620 million. The Company is also projecting to generate free cash flow of approximately $400 million for FY18.
Stock Performance Snapshot
April 05, 2018 - At Thursday's closing bell, Gildan Activewear's stock was marginally up 0.31%, ending the trading session at $29.49.
Volume traded for the day: 395.87 thousand shares.
Stock performance in the last month – up 1.41%; and past twelve-month period – up 12.82%
After yesterday's close, Gildan Activewear's market cap was at $6.41 billion.
Price to Earnings (P/E) ratio was at 18.32.
The stock has a dividend yield of 1.53%.
The stock is part of the Consumer Goods sector, categorized under the Textile-Apparel Clothing industry. This sector was up 0.6% at the end of the session.
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