For the fourth fiscal quarter ended January 4, 2015, Gildan Activewear said it slipped in to losses, when compared with fourth fiscal quarter of previous year.
Gildan reported a net loss of US$41.2 million or US$0.34 per diluted share for the fourth fiscal quarter of 2014 compared with net earnings of US$41.7 million or US$0.34 per share in the prior year quarter.
Gildan said the adjusted net loss for the quarter was in line with the Company’s previously projected net loss of approximately US$0.30 per share.
Consolidated net sales in the fourth fiscal quarter of 2014 amounted to US$390.6 million, down 13.5 per cent from US$451.4 million in the year ago quarter.
Earlier, Gildan had projected net sales for the quarter of approximately US $400 million.
Gildan attributed the decline in sales and earnings compared to last year to strategic pricing actions in Printwear, which it had announced on December 3, 2014 in order to reinforce its leadership position.
The apparel marketer lowered base selling prices significantly and reduced and simplified its discount structure, in order to be responsive to distributors.
“The selling price reductions reflect the pass through of a portion of the cost savings from the Company’s capital investments in new yarn spinning facilities and other capital investment projects,” it added.
Net sales for the Printwear segment amounted to US$160.3 million, down from US $261.8 million in the corresponding quarter of the prior year.
The dip in Printwear sales reflects lower net selling prices, including impact of distributor inventory devaluation discount of US$47.5 million and increased inventory destocking by US distributors.
“This more than offset the approximate 15 per cent rise in international printwear sales which was achieved in spite of the decline in the value of currencies relative to the US dollar,” Gildan explained.
Net sales for Branded Apparel touched US$230.3 million, up 21.5 per cent from US $189.6 million in the same quarter of last year.
The segment sales growth was due to the acquisition of Doris, organic growth in Gildan branded programs, particularly sales of branded underwear which zoomed 90 per cent and growth in licensed brands.
“These positive factors were partially offset by lower sales for Gold Toe brands due to the timing of shipments and inventory destocking by certain retail customers,” Gildan observed.
Excluding the impact of Doris, organic sales growth in Branded Apparel was approximately 8 per cent in spite of the decline in Gold Toe sales.
Gildan also inked an agreement to acquire substantially all of the assets of Comfort Colors, a leading brand in the growing fashion basics segment of the Printwear market, for approximately US$100 million.
Including the impact of Comfort Colors, Gildan expects 2015 net sales to be slightly in excess of US$2.65 billion, compared to its initial guidance of close to US$2.65 billion provided on December 4, 2014.
