Results and expansion plans from Gildan
Canada-based sportswear and casual apparel company Gildan Activewear Inc. has posted improved results for its second quarter ended March 30 and has also announced expansion plans for its Honduras plant.
The company reported second quarter net earnings of US$41.7 million compared with $21.1 million in the second quarter of 2007. Sales for the quarter totalled $293.8 million, up 26.5% from $232.1 million in the second quarter of last year. The increase in sales revenues was due to an increase of 98.4% in sock sales due to the acquisition of Prewett and new retail sock programmes obtained in fiscal 2007, a 7.5% increase in unit volumes for activewear, an approximate 3% increase in activewear unit selling prices and a more favourable activewear product mix. However, delays in the introduction of new high-value ring-spun T-shirt and sport shirt products at the company's textile facility in the Dominican Republic hampered growth.
Sales for the six months ended March 30 were $544.2 million, up 30.2% compared with the same period last year, while net earnings for the period were $69.2 million compared with $36.8 million.
Meanwhile, the company believes production issues in the Dominican Republic will be fully resolved in the second half of 2008 and that these issues will not impact its ability to support its unit sales growth in fiscal 2009. It expects to be able to produce in excess of 50 million dozens of activewear and underwear in 2009. However, new capacity will be required in order to be able to meet projected sales demand for the company's products in fiscal 2010. The company intends to construct a third large-scale, vertically-integrated textile facility in Honduras at a cost of $100-$110 million. It will also construct a new distribution centre in Honduras.
