Gildan Activewear (GIL) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales from continuing operations reached $1.58 billion, up 72.3% year-over-year, driven by the HanesBrands acquisition and integration synergies, partially offset by inventory reductions.

• Adjusted diluted EPS from continuing operations was $1.28, up 32% year-over-year; GAAP diluted EPS was $0.49.

• Integration of HanesBrands is progressing well, with most 2026 synergy initiatives already implemented and $100 million in targeted synergies for 2026.

• Announced definitive agreement to divest HanesBrands Australia (HAA) for approximately $490 million, with proceeds to reduce debt and accelerate deleveraging.

• The company recorded a net loss of $50 million due to a $140 million loss from discontinued operations (HAA), which is being divested.

Financial highlights

• Adjusted gross profit was $545 million (34.5% margin), up from $289 million (31.5%) last year.

• Adjusted operating income was $352 million, up $144 million year-over-year; adjusted operating margin at 22.3%.

• Adjusted EBITDA for Q2 was $421 million, up 70.8% year-over-year; adjusted EBITDA margin was 26.6%.

• Free cash flow for Q2 was $326 million; net debt at quarter-end was $4.69 billion, leverage ratio at 3.2x net debt to trailing 12-month pro forma adjusted EBITDA.

• SG&A expenses rose to $194 million, mainly from HanesBrands integration, partially offset by $37.5 million in Barbados government subsidies.

Outlook and guidance

• 2026 revenue expected at the low end of $6.0–$6.2 billion; full-year adjusted operating margin guided at ~21.8%.

• Adjusted diluted EPS for 2026 projected at $4.65–$4.75, up 32.5–35% year-over-year.

• Free cash flow for 2026 expected to be ~$1.0 billion; capex to be ~3% of net sales.

• Q3 2026 net sales expected at ~$1.65 billion, with adjusted operating margin of ~26%.

• Guidance reflects anticipated $220 million in IEEPA tariff refunds, with recurring structural benefit from CAFTA-DR tariff changes.