Printwear & Promotion The Total Promotional Package
In its third quarter fiscal results, Gildan Activewear has announced that its Printwear segment reported operating income of $129.7million – up 8.8% from $119.2million in the third quarter of fiscal 2013.
Operating margins for Printwear were 26.8% compared with 27.5% in the third quarter of last year as higher net selling prices and more favourable product-mix were more than offset by higher cotton costs and other inflationary cost increases.
The Branded Apparel segment reported operating income of $15.6million, compared to $27.3million in the third quarter of fiscal 2013. Operating margins were 7.4% versus 15% a year ago.
The decline in operating margins for Branded Apparel was primarily attributable to transitional manufacturing inefficiencies to support the introduction of new retail products and new retail programs and inflationary cost increases, which negatively impacted margins by approximately 700 basis points, together with the impact of higher cotton costs, which the Company has not passed through into higher selling prices in Branded Apparel in order to drive its brand penetration and market share growth. These factors more than offset the continuing positive impact on operating margins of increased sales volume leverage on SG&A expenses, the company said.
Net sales revenue for the first nine months of fiscal 2014 amounted to $1.7billion, up 8.7% from $1.6billion in the same period last year.
The increase in consolidated net sales was mainly due to higher unit sales volumes in both operating segments, more favourable Printwear product-mix and higher net selling prices for Printwear.
The company is projecting sales revenues for fiscal 2014 to be slightly in excess of $2.4 billion, including the acquisition of Doris Inc, which the company completed on July 7, 2014.
Sales revenues for Printwear are projected to be slightly in excess of $1.55billion, up approximately 5.5% compared with fiscal 2013.
Sales revenues for Branded Apparel for fiscal 2014 are projected to be approximately US $850 million, up approximately 19% compared with fiscal 2013.
Cotton costs in the fourth quarter of fiscal 2014 are expected to be comparable to cotton costs in the fourth quarter of last year. Cotton costs in the first half of fiscal 2015 are expected to be higher than the fourth quarter of fiscal 2014. Cotton costs in the second half of fiscal 2015 are expected to be lower than the first half of the year and lower than the second half of fiscal 2014.
