Gildan Activewear (GIL) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 reached $712 million, up 2.3% year-over-year, driven by 9% growth in Activewear, offset by a 38% decline in Hosiery and Underwear due to the Under Armour phase-out.

• 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, reflecting higher tax expenses and lower share count.

• Net earnings increased 7.6% to $85 million, with adjusted net earnings at $89.9 million, impacted by higher financial and income tax expenses.

• The company continues to execute its Sustainable Growth Strategy, focusing on capacity, innovation, and ESG, and maintains its 2025 guidance despite macroeconomic and tariff headwinds.

• $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 percentage points 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.

• SG&A expenses decreased to $87 million, reflecting lower proxy contest and leadership charges, and included an $8.1 million jobs credit from Barbados.

• Cash flows used in operating activities were $142 million, primarily due to increased non-cash working capital; free cash flow was negative $166 million after $23 million in CapEx.

• Net debt at quarter-end was $1.85 billion, with a leverage ratio of 2.2x net debt to adjusted EBITDA, within the 1.5–2.5x target range.

Outlook and guidance

• 2025 revenue expected to grow mid-single digits; adjusted EPS guidance is $3.38–$3.58, up 13–19% year-over-year.

• Full-year adjusted operating margin projected to increase by 50 basis points; CapEx to be about 5% of sales.

• Free cash flow expected above $450 million; continued share repurchases planned under NCIB program.

• Q2 net sales expected up 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.