Gildan profit rises on higher printwear sales volume
(Reuters) - Canadian clothing maker Gildan Activewear Inc (GIL.TO) reported an 84 percent jump in quarterly profit on Thursday, raised its dividend and forecast current-quarter earnings above analysts' expectations, sending its shares up nearly 3 percent.
Gildan said earnings in the fourth quarter ended September 30 were boosted in part by lower cotton costs and higher sales of printwear, clothing on which other manufacturers print their own designs.
The company said it expected first-quarter earnings of 28 cents to 31 cents per share before special items. That is above the analysts' average estimate of 25 cents, according to Thomson Reuters I/B/E/S.
Gildan, which also manufactures private-label and branded apparel, forecast net sales in excess of $400 million for the current quarter.
The company has been shifting its focus away from private-label goods and is making a "significant investment" in marketing its own brands, which include Gildan and Gold Toe. It also holds the U.S. sock licenses for Under Armour Inc (UA.N) and New Balance.
Gross profit margin rose to 28.5 percent from 20.6 percent a year earlier, helped by the lower cotton costs and higher selling prices for branded goods, offset by lower prices for printwear.
Cotton prices are down 23 percent so far this year on expectations of weak demand amid an uncertain economic outlook.
The company forecast fiscal 2013 earnings of $2.60 to $2.70 per share before special items. Analysts were expecting $2.51.
Gildan said it expected net sales of $2.10 billion for the year, compared with the analysts' estimate of $2.22 billion.
The company increased its quarterly dividend by 20 percent to 9 cents per share.
Net income rose to $89 million, or 73 cents per share, in the fourth quarter, from $48.5 million, or 40 cents per share, a year earlier.
Excluding restructuring costs and other items, earnings were 78 cents per share, while analysts had expected 80 cents.
Net sales rose 17 percent to $561.7 million, just below the consensus estimate of $562.7 million.
Gildan's shares rose 2.9 percent to C$34.04 in early trading on the Toronto Stock Exchange.
(Reporting by Ankur Banerjee in Bangalore and Allison Martell in Toronto; Editing by Sriraj Kalluvila and Lisa Von Ahn)
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