Gildan Q2 net sales up 6.5 percent fuelled by activewear

Gildan Activewear Inc. reported strong second quarter results for the period ended June 29, 2025, driven by record net sales and growth in Activewear. While the company reaffirmed its full year 2025 guidance including the impact of tariffs, it narrowed the adjusted diluted EPS guidance for 2025.

"The Gildan Sustainable Growth (GSG) strategy continues to drive solid financial performance, as evidenced by our record second quarter results, driven by strong net sales growth of 12% in Activewear. As we navigate through the current fluid operating environment, we are focusing on what we can control, which is allowing us to continue to strengthen our competitive position and drive profitable top line growth," said Glenn J. Chamandy, Gildan’s president and CEO.

Highlights of Gildan's Q2 results

Gildan reported net sales of 919 million dollars for the second quarter of 2025, representing a 6.5 percent increase over the prior year and aligning with previous guidance. This growth was primarily fuelled by a 12 percent surge in Activewear sales, reaching 822 million dollars. Sales to North American distributors remained solid, while international sales decreased by 14.1 percent year-over-year due to demand softness in certain markets. Sales in the Hosiery and Underwear category were 96 million dollars, down 23.3 percent from the prior year, primarily due to lower volumes and an unfavourable mix amid broader market weakness.

Gildan's gross profit increased to 289 million dollars, representing 31.5 percent, up 110-basis points. The company generated operating income of 199 million dollars, or 21.7 percent of net sales, a significant improvement versus last year. Adjusted operating income was 209 million dollars, or 22.7 percent of net sales, remaining flat year-over-year.

Year-to-date performance and future outlook

For the first six months of fiscal 2025, Gildan's net sales totalled 1,630 million dollars, up 4.6 percent from the same period last year. Activewear sales grew by 10.6 percent to 1,470 million dollars. International sales were down 9.2 percent due to continued demand softness. Hosiery and underwear sales were down 30 percent, reflecting market weakness and the phase-out of the Under Armour business.

Gross profit for the six-month period was 511 million dollars, up 38 million dollars, with a gross margin of 31.4 percent. Operating income reached 329 million dollars, or 20.2 percent of net sales, while adjusted operating income was 344 million dollars, or 21.1 percent of net sales, up 23 million dollars. GAAP diluted EPS and adjusted diluted EPS were 1.47 dollars and 1.56 dollars, respectively, reflecting improved financial performance.

Gildan reaffirmed its full-year 2025 guidance, narrowing its adjusted diluted EPS range to 3.40 dollars to 3.56 dollars, representing a 13 percent to 19 percent year-over-year increase. The company expects full-year revenue growth to be up mid-single digits and adjusted operating margin to improve by approximately 50 basis points. For the third quarter of 2025, net sales are expected to be up low single digits, with adjusted operating margin maintained at a similar level to the second quarter.

In line with its capital allocation priorities, Gildan's board of directors declared a cash dividend of 0.226 dollars per share, payable on September 15, 2025, to shareholders of record as of August 21, 2025.