Gildan Activewear (GIL) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 net sales of $891.1 million, up 2.4% year-over-year, with strong Activewear and international sales growth.

• Adjusted operating margin reached 22.4%, up 430 basis points year-over-year, driven by lower input costs and the Barbados jobs credit.

• Adjusted diluted EPS reached a record $0.85, up 15% year-over-year.

• Returned $404 million to shareholders in Q3 and $643 million year-to-date via dividends and share repurchases.

• Incurred $82.3 million in non-recurring proxy contest and leadership change costs year-to-date.

Financial highlights

• Q3 2024 gross profit was $278 million (31.2% margin), up 16.1% year-over-year, driven by lower input costs.

• Adjusted operating income for Q3 was $200 million (22.4% margin), up 27.1% year-over-year.

• Adjusted EBITDA for Q3 was $236.1 million, up 25.4% year-over-year.

• Free cash flow for Q3 was $149 million; CapEx at $30 million.

• Net debt at quarter-end was $1.51 billion, with a net debt to EBITDA ratio of 1.9x.

Outlook and guidance

• 2024 revenue growth guidance raised to low single-digits; excluding Under Armour, growth would be mid-single digits.

• Adjusted operating margin expected to slightly exceed 21% for 2024.

• Adjusted diluted EPS guidance set at $2.97–$3.02, up 15.5–17.5% year-over-year.

• CapEx expected at ~5% of net sales; free cash flow to exceed 2023 levels.

• Three-year targets reaffirmed: mid-single digit sales growth, improved margins, and mid-teen EPS growth.