Gildan Activewear cuts 2019 guidance on weaker third-quarter results

MONTREAL — Gildan Activewear Inc. has cut it 2019 guidance after warning that its third-quarter results will be lower on weaker demand for imprintable apparel in North America and internationally.

The low-cost producer says it expects to report Oct. 31 that earnings will decrease about seven per cent to 51 cents US per share for the period ended Sept. 29 and about 53 cents on an adjusted basis.

Sales are expected to be down two per cent to about US$740 million, including US$620 million of active wear sales and US$120 million from hosiery and underwear sales.

The Montreal-based company said on Aug. 1 that its adjusted EPS would be flat on about five per cent sales growth.

As a result of the revised guidance, it is cutting its full-year guidance to reflect a sales shortfall about US$50 million in the third quarter and continued weakness in the fourth quarter that will cut sales by about US$70 million. Distributor inventory reductions should reduce sales by about US$100 million.

Consequently, it is now expecting 2019 sales to be down low single digits from 2018 and diluted EPS to be US$1.50 to $1.55 and adjusted EPS of between $1.65 and $1.70 per share.

This report by The Canadian Press was first published Oct. 17, 2019.

Companies in this story: (TSX:GIL).

The Canadian Press