Canadian apparel maker Gildan Activewear Inc. reported record net sales for the first quarter ended March 29, 2026. The results represent the first full reporting period after the consolidation of the US group HanesBrands Inc. into the consolidated financial statements.
Net sales from continuing operations reached $1.17 billion. This corresponds to an increase of 63.8 percent compared to the previous year. The development corresponded to the company’s previous forecast of around 1.15 billion US dollars. The significant increase is primarily due to the acquisition of HanesBrands, but was partially dampened by strategic integration measures to optimize manufacturing. Sales were down compared to pro forma net sales of $1.29 billion.
Management attributed this to lower sales volumes. These resulted from a proactive reduction of inventories in the sales channels. The aim of this measure was to optimize the supply chain during the integration process.
Shift in sales distribution
The company has begun dividing net sales into two main channels: wholesale and retail. Wholesale sales were $552 million, down 11.9 percent year-over-year. This was influenced by the inventory reductions already mentioned. The lack of pull-forward effects – purchases in the same period of the previous year before the introduction of tariffs – also played a role.
Retail sales rose to $614 million from $85 million a year ago. This shift reflects the inclusion of HanesBrands as well as higher selling prices, with key underwear brands gaining market share during the quarter. Gildan reported an operating loss of $1 million for the quarter, compared to a profit of $130 million a year ago. However, adjusted operating income reached $167 million, up $31 million year over year.
Integration progress and synergy goals
The integration of HanesBrands is progressing according to plan. Gildan President and Chief Executive Officer (CEO) Glenn J. Chamandy said the company is on track to realize approximately $100 million in synergies in 2026. The long-term goal remains an annual cost synergy of $250 million over the next three years.
Despite an uncertain macroeconomic environment, Gildan has maintained its full-year 2026 guidance: revenue is expected to be between $6 billion and $6.2 billion. The adjusted operating margin should be around 20 percent. Adjusted diluted earnings per share (EPS) are forecast in a range of $4.20 to $4.40.
For the second quarter of 2026, the company expects net sales of around $1.6 billion. The Board of Directors also approved the distribution of a quarterly cash dividend of $0.249 per share, to be paid on June 15, 2026.
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