Gildan Activewear Inc. sales for the third quarter ending October 3, 2021, totaled 802 million dollars, up 33 percent over the prior year, consisting of activewear sales of 656 million dollars, up 44 percent and sales in the hosiery and underwear category of 146 million dollars, in line with the prior year level.
The company said, activewear shipments were up in imprintables channels both in North America and internationally, as well as in North American retail channels, compared to the third quarter last year.
“Our record performance for the third quarter was driven by the improved economics of our business, underpinned by our Back to Basics model, the operational excellence of our team and the ongoing recovery in demand, which drove sales volumes which are now above pre-pandemic levels,” said Glenn J. Chamandy, Gildan president and CEO.
Gildan Activewear achieves sales increase over pre-pandemic period
Sales in the quarter grew from pre-pandemic levels, up 8 percent compared to sales of 740 million dollars in the third quarter of 2019. Sales in the hosiery and underwear category were up 21 percent, driven by the strength in underwear sales volumes which more than doubled over third quarter 2019 levels, partly offset by lower sales of socks.
The company generated gross profit of 282 million dollars in the quarter, while adjusted gross profit totaled 252 million dollars, up 108 percent and 86 percent, respectively, over the prior year, driven by our growth in sales and strong margin performance. Gross margin of 35.1 percent in the quarter was up 1,260 basis points and adjusted gross margin1 of 31.4 percent was up 890 basis points compared to the third quarter of 2020. Compared to the third quarter of 2019, adjusted gross margin in the third quarter of 2021 was up 400 basis points.
Gildan generated operating income of 201 million dollars or 25.1 percent of sales and adjusted operating income of 172 million dollars or 21.5 percent of sales, in the third quarter of 2021. The company reported net earnings of 188 million dollars or 95 cents per share on a diluted basis, for the three months ended October 3, 2021 and adjusted net earnings of 159 million dollars or 80 cents per share on a diluted basis.
Adjusted operating margin of 21.5 percent in the third quarter this year was up 500 basis points compared to 16.5 percent in the third quarter of 2019. Combined with the return to above pre-pandemic sales levels, the company delivered adjusted diluted EPS growth of 51 percent in the quarter, compared to adjusted diluted EPS of 53 cents in the third quarter of 2019.
Gildan Activewear’s year-to-date operating results
Net sales for the nine months ended October 3, 2021 of 2,138 million dollars were up 66 percent over the same period last year, reflecting increases of 81 percent in activewear sales and 21 percent in the hosiery and underwear category. The year-over-year increase in activewear sales where the company generated sales of 1,738 million dollars was primarily driven by volume increases in all channels and favourable product-mix.
The increase in the hosiery and underwear category where Gildan generated sales of 401 million dollars in the first nine months of 2021 was also driven by higher sales volumes in both underwear and in sock products compared to last year, as well as favourable product mix.
On a year-to-date basis, gross profit was 711 million dollars and gross margin of 33.3 percent compared to a gross profit of 94 million dollars and gross margin of 7.2 percent in the prior year. Adjusted gross profit for the period totaled 663 million dollars or 31 percent of sales, up from adjusted gross profit of 128 million dollars and adjusted gross margin of 9.8 percent in the same period last year.
Operating income for the period was 475 million dollars or 22.2 percent of sales compared to an operating loss of 260 million dollars last year. Adjusted operating income totaled 431 million dollars or 20.2 percent of sales, compared to an adjusted operating loss of 88 million dollars last year. The company reported net earnings of 433 million dollars or 2.18 dollars per share on a diluted basis and adjusted net earnings of 390 million dollars or 1.96 dollars per diluted share, for the first nine months of 2021, compared to a net loss of 293 million dollars or 1.48 dollars per diluted share, and an adjusted net loss of 126 million dollars or 64 cents per diluted share, respectively, in the same period last year.
The company’s board of directors has declared a cash dividend of 154 cents per share, payable on December 20, 2021 to shareholders of record as of November 24, 2021.