Canada's Gildan expects mid-single-digit growth in 2025
Canadian manufacturer of branded clothing Gildan has reaffirmed its 2025 outlook, reflecting confidence in its Gildan Sustainable Growth (GSG) strategy and resilient vertically integrated business model, despite ongoing macroeconomic and geopolitical challenges. The company expects full-year revenue to grow in the mid-single digits, with adjusted operating margin rising by approximately 50 basis points (bps).
The adjusted diluted earnings per share (EPS) is projected to range between $3.38 and $3.58, representing a year-on-year (YoY) increase of roughly 13 to 19 per cent. The capital expenditure (capex) is anticipated to be around 5 per cent of sales, and free cash flow is expected to exceed $450 million.
Gildan has reaffirmed its 2025 outlook with mid-single-digit revenue growth, a 50 bps rise in operating margin, EPS of $3.38â€'$3.58, and free cash flow above $450 million. Its Q1 2025 sales rose 2.3 per cent to $712 million, led by 9 per cent activewear growth. Gross margin improved to 31.2 per cent. It earned recognition in S&P's Sustainability Yearbook and CDP's Leadership band for ESG performance.
The forecast incorporates the impact of newly imposed US tariffs and global trade policy changes, with mitigation strategies in place, including operational flexibility and manufacturing cost advantages. Continued growth is expected across key product categories through innovation, new programme launches, and market share gains, Gildan said in a press release.
Gildan also benefits from the Barbados jobs credit programme introduced in 2024 and foresees a stable effective tax rate despite the implementation of global minimum tax legislation in Canada and Barbados.
For the second quarter (Q2) of 2025, the company expects net sales to grow mid-single digits, with adjusted operating margin remaining comparable to Q2 2024.
Meanwhile, Gildan recorded net sales of $712 million in the first quarter (Q1) of 2025, an increase of 2.3 per cent YoY, in line with previously provided guidance of low single-digit growth. Activewear sales of $647 million were up 9 per cent driven by higher sales volumes which reflected favourable product mix in North America, with a higher proportion of fleece and ring spun products.
The company continued to see market share gains in key growth categories and a positive market response to its recently introduced new products which feature key innovations, including new soft cotton technology. Furthermore, in parallel with solid sales to North American distributors, it observed continued momentum with national account customers, driven by its strong overall competitive positioning, added the release.
Its international sales decreased by 2.5 per cent YoY primarily due to softness in Latin America (LATAM) and Asia, partly offset by strong growth in Europe.
The company generated gross profit of $222 million, or 31.2 per cent of net sales, versus $211 million, or 30.3 per cent of net sales, in Q1 2024 representing a 90-bps improvement which was primarily driven by lower raw material costs.
Additionally, Gildan generated operating income of $130 million, or 18.2 per cent of net sales, comparing favourably to $105 million, or 15.1 per cent of net sales last year, which includes $5 million of restructuring and acquisition-related costs.
'Through the continued successful execution of our three strategic pillars— capacity expansion, innovation and ESG —we are not only further strengthening our competitive position but also driving top line growth and enhancing profitability. Our solid foundation, underpinned by our vertically integrated business model, and our operational and financial discipline, provide us with agility to navigate the current uncertain environment. We remain deeply committed to delivering long-term value for our stakeholders and to diligently executing on the opportunities that lie ahead,' said Glenn J Chamandy, president and chief executive officer (CEO) at Gildan.
Gildan was included in S&P's 2025 sustainability yearbook for the 13th year and listed in the Carbon Disclosure Project's (CDP) Leadership band for the fifth time. The company received recognition for its performance in greenhouse gas (GHG) emissions, risk management, and emission reduction measures, indicating continued efforts in environmental, social, and governance (ESG) practices, said the release.
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