Upcoming AWS Coverage on Under Armour Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 17, 2017 / Active Wall St. announces its post-earnings coverage on Gildan Activewear Inc. (NYSE: GIL). The Company reported its first quarter fiscal 2017 financial results on May 03, 2017. The apparel maker surpassed top- and bottom-line expectations and also re-affirmed its guidance. Register with us now for your free membership at:

http://www.activewallst.com/register/

One of Gildan Activewear's competitors within the Textile - Apparel Clothing space, Under Armour, Inc. (NYSE: UAA), reported on April 27, 2017, its financial results for Q1 ended March 31, 2017. AWS will be initiating a research report on Under Armour in the coming days.

Today, AWS is promoting its earnings coverage on GIL; touching on UAA. Get our free coverage by signing up to:

http://www.activewallst.com/register/

Earnings Reviewed

Gildan's consolidated net sales of $665.4 million in the first quarter ended April 02, 2017, grew 12.2% compared to Q1 2016 net sales of $593.4 million. The increase in consolidated net sales was mainly due to the impact of the 2016 acquisitions of Alstyle and Peds as well as the American Apparel acquisition, which closed during the reported quarter, and organic growth driven by higher net selling prices and favorable product-mix. The Company's reported numbers beat analysts' consensus of $664.4 million.

Gildan's consolidated gross margin in Q1 2017 was 28.4%, up 200 basis points compared to the year ago same period primarily due to the positive net impact of net selling prices, manufacturing and raw material costs. Gildan's adjusted operating margins were 15.0%, up 200 basis points compared to 13.0% in the same period last year, reflecting consolidated gross margin expansion and SG&A leverage in Branded Apparel, partly offset by the SG&A margin impact of acquisitions in Printwear.

For Q1 2017, Gildan's net earnings totaled $83.5 million, or $0.36 per share, compared with net earnings of $63.2 million, or $0.26 per share on a diluted basis, for Q1 2016. Excluding after-tax restructuring and acquisition-related costs of $6.6 million in the reported quarter and $5.8 million in the same quarter last year, Gildan reported adjusted net earnings of $90.1 million, or $0.39 per share on a diluted basis, for Q1 2017, up from $69.0 million, or $0.28 per share on a diluted basis, in the prior year comparable quarter. The Company's earnings numbers exceeded Wall Street's estimates of $0.35 per share.

Segmented Operating Results

During Q1 2017, net sales for Gildan's Printwear segment amounted to $445.6 million, up 13.6% from $392.1 million in Q1 2016, primarily attributable to sales of $39.5 million from the Alstyle and American Apparel acquisitions; higher net selling prices; and favorable product-mix, partly offset by unfavorable foreign exchange impacts. The Printwear segment's operating income for the reported quarter surged 24.3% to $105.9 million compared to $85.2 million for the same period last year. Operating margins for Printwear were 23.8%, up 210 basis points on a y-o-y basis due primarily to the favorable net impact of net selling prices, manufacturing and raw material costs, partly offset by unfavorable foreign exchange impacts and SG&A expenses from the Alstyle acquisition.

Gildan's net sales for the Branded Apparel segment in Q1 2017 totaled $219.7 million, up 9.2% from $201.2 million in Q1 2016, primarily due to sales of $20.9 million from the Peds acquisition and organic sales growth which was partially offset by the impact from the planned exit of certain private label programs.

For Q1 2017, operating income for the Branded Apparel segment of $18.6 million advanced approximately 24.8% compared to $14.9 million in Q1 2016. Branded Apparel operating margins of 8.4% improved 100 basis points compared to the year ago corresponding quarter primarily attributable to the favorable net impact of net selling prices, manufacturing and raw material costs, as well as the benefit of volume leverage on SG&A expenses.

Cash Flow

Gildan generated free cash flow of $41.3 million in Q1 2017 compared to a use of $58.4 million of free cash in Q1 2016. The approximate $100 million improvement in free cash flow was due to higher earnings, strong working capital management, and lower capital expenditures. Capital expenditures of $24.8 million in the reported quarter were primarily for investments in textile capacity as well as investments in garment dyeing and distribution.

On February 23, 2017, the Company announced the renewal of a normal course issuer bid (NCIB) beginning February 27, 2017, and expiring February 26, 2018, to purchase for cancellation up to 11,512,267 common shares, representing approximately 5% of the Company's issued and outstanding common shares as of February 17, 2017.

During Q1 2017, Gildan repurchased approximately 3.5 million common shares under its normal course issuer bid (NCIB), which it renewed effective as of February 27, 2017, at a total cost of $89.3 million. Gildan ended the quarter with net debt of $713.0 million and a leverage ratio of 1.3 time's net debt to adjusted EBITDA.

Gildan's Board of Directors has declared a cash dividend of U.S. $0.0935 per share, payable on June 12, 2017, to shareholders of record on May 18, 2017.

Outlook

Gildan reaffirmed its full year 2017 financial guidance of adjusted diluted EPS in the range of $1.60 to $1.70 on expected consolidated net sales growth in the high single-digit range. The Company's Printwear and Branded Apparel net sales in FY17 are each expected to increase in the high single-digit range driven by organic growth and the projected aggregate impact of approximately $160 million to $185 million from the acquisitions of Alstyle, Peds, and American Apparel. Gildan also reiterated its expectations for adjusted EBITDA of $555 million-$585 million and free cash flow in excess of $400 million for FY17.

Stock Performance

At the closing bell, on Tuesday, May 16, 2017, Gildan Activewear's share price finished yesterday's trading session at $27.76, slipping 2.22%. A total volume of 745.71 thousand shares exchanged hands, which was higher than the 3 months average volume of 714.50 thousand shares. The stock has surged 10.87% and 10.97% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the Company have rallied 9.82%. The stock is trading at a PE ratio of 17.61 and has a dividend yield of 1.12%.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street