* Adjusted EPS 53 cents vs analyst forecast 49 cents
* Raises full-year sales and gross margin forecasts
(Adds analyst comment, details, byline; In U.S. dollars unless
By S. John Tilak
TORONTO, May 11 Clothing maker Gildan
Activewear Inc (GIL.TO) (GIL.N) reported a higher quarterly
profit on Wednesday, topping analyst estimates, as price
increases and greater sales volumes overshadowed a rise in raw
The maker of basic clothing items such as T-shirts, socks
and underwear also raised its full-year outlook on the back of
the recently announced acquisition of U.S.-based sock maker
Gold Toe Moretz Holdings for about $350 million and more
planned price increases.
Montreal-based Gildan and other clothing manufacturers have
been grappling with the higher cost of raw materials,
especially cotton. The price increases are expected to ease
some of the margin pressure.
The company is a top supplier to the screenprint market in
the United States and Canada, with a market share of more than
60 percent. It sells blank T-shirts, sport shirts and fleece,
which are then printed with designs and logos.
Its market share declined marginally in the quarter.
That was a reflection of the tight supply chain, Stonecap
Securities analyst Scott Rattee said.
"They are still the price leader," Rattee said. "They will
have the market share back when they're able to get the
inventory back where they want them."
Gildan raised its full-year sales forecast to some $1.8
billion, from about $1.6 billion. It expects gross margins of
roughly 25.5 percent, compared with its earlier forecast of
about 25 percent.
Earnings for the second quarter that ended April 3, rose to
$61.4 million, or 50 cents a share, from $48.8 million, or 40
cents a share, a year earlier. Adjusting for special items, its
profit was 53 cents a share.
Analysts on average were looking for earnings of 49 cents a
share, according to Thomson Reuters I/B/E/S.
Revenue rose 17 percent to $383.2 million, compared with
the average analyst estimate of $382.5 million.
Sales of the company's activewear and underwear products
rose 25.3 percent in the quarter, aided by a 19 percent rise in
average net selling prices for activewear and a 6.1 percent
rise in unit volume shipments.
(Reporting by S. John Tilak; Editing by Dave Zimmerman and