* Forecasts quarterly earnings above Wall Street estimate
* Benefits from lower cotton costs
* Raises dividend 20 percent to $0.09 a share
* Shares up nearly 3 percent
Nov 29 Canadian clothing maker Gildan Activewear
Inc 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 Sept. 30
were boosted in part by lower cotton costs and higher sales of
printwear, clothing on which other manufacturers print their own
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
Gildan, which also manufactures private-label and branded
apparel, forecast net sales in excess of $400 million for the
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
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
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
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.