Gildan (GIL) earnings report for the 3rd quarter of their 2021 fiscal year
Category: Gildan (GIL)
Date: 9 November 2021 Stock Price of Gildan (GIL): $41.33 Market Capital of Gildan (GIL): $8.2 billion We take a look at the 3rd quarter earnings report of their 2021 fiscal year of Gildan Activewear (GIL) a leading manufacturer of performance athletics apparel. For the quarter the group reported revenues of $1.54 billion and net income of $113.4 million
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- Our record performance for the third quarter was driven by the improved economics of our business, underpinned by our Back to Basics model, the operational excellence of our team and the ongoing recovery in demand, which drove sales volumes which are now above pre-pandemic levels - Glenn J. Chamandy, Gildan president and CEO."
About Gildan (GIL)
Gildan is a leading manufacturer of everyday basic apparel which markets its products in North America, Europe, AsiaPacific, and Latin America, under a diversified portfolio of Company-owned brands, including Gildan®, American Apparel®, Comfort Colors®, Gildan® Hammer™, Prim + Preux®, GoldToe®, Anvil® by Gildan®, Alstyle®, Secret®, Silks®, Secret Silky®, Therapy Plus®, Peds® and MediPeds®, and under the Under Armour® brand through a sock licensing agreement providing exclusive distribution rights in the United States and Canada. Our product offering includes activewear, underwear, socks, hosiery, and legwear products 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. Gildan owns and operates vertically-integrated, large-scale manufacturing facilities which are primarily located in Central America, the Caribbean, North America, and Bangladesh.
With approximately 46,000 employees worldwide, 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 and www.genuineresponsibility.com, respectively.
With approximately 46,000 employees worldwide, 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 and www.genuineresponsibility.com, respectively.
Overview of Gildan Activewear (GIL) 3rd quarter 2021 earnings report
- Strong margin performance and demand momentum drives record results
- Record third quarter sales of $802 million, up 33% over prior year and 8% over Q3 2019
- Operating margin of 25.1%, adjusted operating margin1 of 21.5%
- Record GAAP diluted EPS of $0.95, adjusted diluted EPS1 of $0.80 up 167% over Q3 2020 and 51% vs Q3 2019
- Record third quarter free cash flow1 of $232 million, $478 million year-to-date
Gildan (GIL) management commentary on their 3rd quarter 2021 earnings
Montreal, Thursday, November 4, 2021 – Gildan Activewear Inc. (GIL: TSX and NYSE) today announced results for the third quarter ended October 3, 2021. “Our record performance for the third quarter was driven by the improved economics of our business, underpinned by our Back to Basics model, the operational excellence of our team and the ongoing recovery in demand, which drove sales volumes which are now above pre-pandemic levels,” said Glenn J. Chamandy, Gildan president and CEO. “Further, I feel confident that our team will continue to navigate through the tight supply chain environment, manage inflationary pressures and deliver results for our shareholders as we continue to move forward.”
Outlook Commentary
The recovery from the pandemic continues to progress well in North America driving positive POS trends compared to pre-COVID 2019 levels. Further, while supply chain tightness in certain areas and rising inflationary pressure are creating headwinds across the industry, we believe our relative positioning is strong given our vertically-integrated manufacturing platform. This combined with recent pricing actions implemented in the fourth quarter this year, gives us confidence that we are well positioned to manage through current inflationary pressures and to continue to be in a position to deliver on our operating margin target. More importantly, as our focus shifts to a capacity, innovation and ESG-driven, sustainable growth strategy, it gives us confidence that we are well placed to capitalize on market share opportunities and create long term value for our shareholders.
The recovery from the pandemic continues to progress well in North America driving positive POS trends compared to pre-COVID 2019 levels. Further, while supply chain tightness in certain areas and rising inflationary pressure are creating headwinds across the industry, we believe our relative positioning is strong given our vertically-integrated manufacturing platform. This combined with recent pricing actions implemented in the fourth quarter this year, gives us confidence that we are well positioned to manage through current inflationary pressures and to continue to be in a position to deliver on our operating margin target. More importantly, as our focus shifts to a capacity, innovation and ESG-driven, sustainable growth strategy, it gives us confidence that we are well placed to capitalize on market share opportunities and create long term value for our shareholders.
Gildan (GIL) stock price chart over the last 5 years
The image below shows the stock price history of Gildan Activewear over the last 5 years. And its been a pretty decent time for Gildan Activewear stockholders. Over the last 5 years the stock of Gildan increased by 43.6%.
The stock of Gildan is trading at a lot closer to its 52 week high than it is to its 52 week low, which to us is a clear indication that the short term sentiment and momentum of Gildan stock is positive at this point in time,
The stock of Gildan is trading at a lot closer to its 52 week high than it is to its 52 week low, which to us is a clear indication that the short term sentiment and momentum of Gildan stock is positive at this point in time,
Gildan Activewear (GIL) stock valuation
So what do we value Gildan Activewear (GIL) stock at after the release of their latest earnings report? Based on Gildan's latest earnings report our valuation models provides a target price (full value price) for Gildan Activewear at $46.70 a stock. We therefore believe that the stock of Gildan Activewear is undervalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $46.70 therefore we believe a good entry point into Gildan Activewear stock is at $42 or below.
Since Gildan Activewear is trading at below our suggested entry price we rate the stock of Gildan Activewear as a BUY
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $46.70 therefore we believe a good entry point into Gildan Activewear stock is at $42 or below.
Since Gildan Activewear is trading at below our suggested entry price we rate the stock of Gildan Activewear as a BUY
Next earnings release of Gildan Activewear (GIL)
It is expected that Gildan Activewear will publish their 4th quarter 2021 earnings report in late February 2021