Gildan Reports Results for the First Quarter of 2025; Maintains Full Year Guidance

4 hours ago 1

Article content

(in $ millions)	Q1 2025	Q1 2024
Net earnings	84.7	78.7
Restructuring and acquisition-related costs	5.0	0.8
Costs relating to proxy contest and leadership changes and related matters	0.9	19.7
Depreciation and amortization	30.3	31.6
Financial expenses, net	29.9	22.7
Income tax expense	15.1	3.7
Adjusted EBITDA	165.9	157.2

Article content

Free cash flow
Free cash flow is defined as cash flow from operating activities, less cash flow used in investing activities excluding cash flows relating to business acquisitions. The Company considers free cash flow to be an important indicator of the financial strength and liquidity of its business, and it is a key metric used by management in managing capital as it indicates how much cash is available after capital expenditures to repay debt, to pursue business acquisitions, and/or to redistribute to its shareholders. Management believes that free cash flow also provides investors with an important perspective on the cash available to us to service debt, fund acquisitions, and pay dividends. In addition, free cash flow is commonly used by investors and analysts when valuing a business and its underlying assets. This measure does not have any standardized meanings prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies.

Article content

(in $ millions)	Q1 2025		Q1 2024
Cash flows from (used in) operating activities	(142.2	)	(27.4	)
Cash flows from (used in) investing activities	(23.3	)	(43.9	)
Adjustment for:
Business acquisitions	—		—
Free cash flow	(165.5	)	(71.3	)

Article content

Total debt and net debt
Total debt is defined as the total bank indebtedness, long-term debt (including any current portion), foreign currency component of derivative financial instruments related to the cross-currency swap’s notional amount, and lease obligations (including any current portion), and net debt is calculated as total debt net of cash and cash equivalents. The Company considers total debt and net debt to be important indicators for management and investors to assess the financial position and liquidity of the Company and measure its financial leverage. These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.

Article content

(in $ millions)	Mar 30, 2025		Dec 29, 2024
Long-term debt (including current portion)	1,803.6		1,535.9
Bank indebtedness	—		—
Foreign currency component of derivative financial instrument on Canadian Senior unsecured notes	7.7		14.1
Lease obligations (including current portion)	113.3		117.4
Total debt	1,924.6		1,667.4
Cash and cash equivalents	(75.5	)	(98.8	)
Net debt	1,849.1		1,568.6

Article content

Net debt leverage ratio
The net debt leverage ratio is defined as the ratio of net debt to pro-forma adjusted EBITDA for the trailing twelve months, all of which are non-GAAP measures. The pro-forma adjusted EBITDA for the trailing twelve months reflects business acquisitions made during the period, as if they had occurred at the beginning of the trailing twelve-month period. The Company has currently set a net debt leverage target ratio of 1.5 to 2.5 times pro-forma adjusted EBITDA for the trailing twelve months. The net debt leverage ratio serves to evaluate the Company’s financial leverage and is used by management in its decisions on the Company’s capital structure, including financing strategy. The Company believes that certain investors and analysts use the net debt leverage ratio to measure the financial leverage of the Company, including our ability to pay off our incurred debt. The Company’s net debt leverage ratio differs from the net debt to EBITDA ratio that is a covenant in our loan and note agreements, and therefore the Company believes it is a useful additional measure. This measure does not have any standardized meanings prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies.

Article content

(in $ millions, or otherwise indicated)	Mar 30, 2025	Dec 29, 2024
Adjusted EBITDA for the trailing twelve months	842.5	833.8
Adjustment for:
Business acquisitions	—	—
Pro-forma adjusted EBITDA for the trailing twelve months	842.5	833.8
Net debt	1,849.1	1,568.6
Net debt leverage ratio⁽¹⁾	2.2	1.9

Article content

^{(1) The Company’s total net debt to EBITDA ratio for purposes of its term loans and revolving facility was 2.3x and for purposes of U.S. private placement notes was 2.5x at March 30, 2025.}

Article content

Caution Concerning Forward-Looking Statements

Article content

Certain statements included in this press release constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation and regulations and are subject to important risks, uncertainties, and assumptions. This forward-looking information includes, amongst others, information with respect to our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimates, and intentions, including, without limitation, our expectation with regards to revenue growth or net sales, adjusted operating margins, capital expenditures, adjusted diluted EPS, free cash flow as provided in our financial outlook for the second quarter of 2025 and full 2025 fiscal year set forth in this press release under the section “2025 Outlook”. Forward-looking statements generally can be identified by the use of conditional or forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “project”, “assume”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, or the negatives of these terms or variations of them or similar terminology.

Article content

We refer you to the Company’s filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission, as well as the risks described under the “Financial risk management”, “Critical accounting estimates and judgments”, and “Risks and uncertainties” sections of our most recent Management’s Discussion and Analysis for a discussion of the various factors that may affect the Company’s future results. Material factors and assumptions that were applied in drawing a conclusion or making a forecast or projection are also set out throughout such document and this press release.

Article content

Forward-looking information is inherently uncertain, and the results or events predicted in such forward-looking information may differ materially from actual results or events. Material factors, which could cause actual results or events to differ materially from a conclusion, forecast, or projection in such forward-looking information, include, but are not limited to:

Article content

changes in general economic, financial or geopolitical conditions globally or in one or more of the markets we serve;
our ability to implement our growth strategies and plans, including our ability to bring projected capacity expansion online;
the intensity of competitive activity and our ability to compete effectively;
our reliance on a small number of significant customers, including our largest distributor;
the fact that our customers do not commit to minimum quantity purchases;
our ability to anticipate, identify, or react to changes in consumer preferences and trends;
our ability to manage production and inventory levels effectively in relation to changes in customer demand;
fluctuations and volatility in the prices of raw materials and energy related inputs, from current levels, used to manufacture and transport our products;
our reliance on key suppliers and our ability to maintain an uninterrupted supply of raw materials, intermediate materials, and finished goods;
the impact of climate, political, social, and economic risks, natural disasters, epidemics, pandemics and endemics, in the countries in which we operate or sell to, or from which we source production;
disruption to manufacturing and distribution activities due to such factors as operational issues, disruptions in transportation logistic functions, labour disruptions, political or social instability, weather-related events, natural disasters, epidemics and pandemics, and other unforeseen adverse events;
compliance with applicable trade, competition, taxation, environmental, health and safety, product liability, employment, patent and trademark, corporate and securities, licensing and permits, data privacy, bankruptcy, anti-corruption, and other laws and regulations in the jurisdictions in which we operate;
the imposition of trade remedies, compliance with or changes to duties and tariffs, international trade legislation, bilateral and multilateral trade agreements and trade preference programs that the Company is currently relying on in conducting its manufacturing operations or the application of safeguards thereunder;
the impact, including broader economic impacts, of the tariffs imposed by the U.S. Administration through a series of Executive Orders, and of any retaliation measures adopted by other governments, or the imposition of further restrictions or prohibitions on the export or import of goods between countries;
elimination of government subsidies and credits that we currently benefit from, and the non-realization of anticipated new subsidies and credits;
factors or circumstances that could increase our effective income tax rate, including the outcome of any tax audits or changes to applicable tax laws or treaties;
changes to and failure to comply with consumer product safety laws and regulations;
changes in our relationship with our employees or changes to domestic and foreign employment laws and regulations;
our reliance on key management and our ability to attract and/or retain key personnel;
negative publicity as a result of actual, alleged, or perceived violations of human rights, labour and environmental laws or international labour standards, or unethical labour or other business practices by the Company or one of its third-party contractors;
our ability to protect our intellectual property rights;
operational problems with our information systems or those of our service providers as a result of system failures, viruses, security and cyber security breaches, disasters, and disruptions due to system upgrades or the integration of systems;
an actual or perceived breach of data security;
rapid developments in artificial intelligence;
our ability to successfully integrate acquisitions and realize expected benefits and synergies;
changes in accounting policies and estimates; and
exposure to risks arising from financial instruments, including credit risk on trade accounts receivables and other financial instruments, liquidity risk, foreign currency risk, and interest rate risk, as well as risks arising from commodity prices.

Article content

These factors may cause the Company’s actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. Forward-looking statements do not consider the effect that transactions or non-recurring or other special items announced or occurring after the statements are made may have on the Company’s business. For example, they do not include the effect of business dispositions, acquisitions, other business transactions, asset write-downs, asset impairment losses, or other charges announced or occurring after forward-looking statements are made. The financial impact of such transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them.

Article content

There can be no assurance that the expectations represented by our forward-looking statements will prove to be correct. The purpose of the forward-looking statements is to provide the reader with a description of management’s expectations regarding the Company’s future financial performance and may not be appropriate for other purposes. Furthermore, unless otherwise stated, the forward-looking statements contained in this press release are made as of the date of this press release, and we do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events, or otherwise unless required by applicable legislation or regulation. The forward-looking statements contained in this press release, including our financial outlook for the 2025 fiscal year and for the second quarter of 2025 under the section “2025 Outlook”, are expressly qualified by this cautionary statement.

Article content

About Gildan

Article content

Gildan is a leading manufacturer of everyday basic apparel. The Company’s product offering includes activewear, underwear and socks, sold to a broad range of customers, including wholesale distributors, screenprinters or embellishers, as well as to retailers that sell to consumers through their physical stores and/or e-commerce platforms and to global lifestyle brand companies. The Company markets its products in North America, Europe, Asia Pacific, and Latin America, under a diversified portfolio of Company-owned brands including Gildan^®, American Apparel^®, Comfort Colors^®, GOLDTOE^®, and Peds^®, and under an exclusive licensing agreement for the printwear channel for Champion^®.

Article content

Gildan owns and operates vertically integrated, large-scale manufacturing facilities which are primarily located in Central America, the Caribbean, North America, and Bangladesh. Gildan operates with a strong commitment to industry-leading labour, environmental and governance practices throughout its supply chain in accordance with its comprehensive ESG program embedded in the Company’s long-term business strategy. More information about the Company and its ESG practices and initiatives can be found at www.gildancorp.com.

Article content

Investor inquiries:

Jessy Hayem, CFA
Senior Vice-President, Head of Investor Relations and
Global Communications
(514) 744-8511

[email protected]

Media inquiries:
Genevieve Gosselin
Director, Global Communications and Corporate Marketing
(514) 343-8814
[email protected]

Article content