Gildan Activewear (GIL) Q1 2025 earnings summary

Executive summary

• Q1 2025 net sales reached $712 million, up 2.3% year-over-year, driven by 9% Activewear growth and market share gains, partially offset by a 38% decline in Hosiery and Underwear sales.

• Operating margin improved to 18.2%, with adjusted operating margin at 19.0%; GAAP diluted EPS was $0.56, up 19%, and adjusted diluted EPS was $0.59, flat year-over-year.

• Net earnings increased 7.6% to $85 million, while adjusted net earnings declined 9.4% due to higher financial and tax expenses.

• The company is executing its Sustainable Growth Strategy, focusing on capacity, innovation, ESG, and long-term shareholder value.

• $62 million was returned to shareholders via share repurchases, and a quarterly dividend of $0.226 per share was declared.

Financial highlights

• Gross margin improved to 31.2% (up 0.9 pp year-over-year), mainly due to lower raw material costs.

• Adjusted operating income was $135 million, or 19% of net sales, up 8% year-over-year.

• Adjusted EBITDA rose 5.5% to $166 million.

• Free cash flow was negative $166 million, mainly due to higher working capital requirements.

• Net debt stood at $1.85 billion, with a leverage ratio of 2.2x net debt to adjusted EBITDA.

Outlook and guidance

• 2025 guidance maintained: mid-single digit revenue growth, adjusted operating margin up ~50 bps, adjusted diluted EPS of $3.38–$3.58 (up 13–19%), and free cash flow above $450 million.

• Q2 2025 net sales expected to rise mid-single digits year-over-year, with operating margin similar to Q2 2024.

• Guidance incorporates impacts of tariffs, global minimum tax, and ongoing share repurchases.

• Capital expenditures planned at ~5% of sales for 2025 and over the next three years.

• Management expects to largely mitigate new U.S. reciprocal tariffs through supply chain flexibility and pricing actions.