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Financial Roundup: Gildan Gains on Acquisitions, HanesBrands Launches Project Booster, Welspun India Profits Drop, Zumiez April Sales Rise

Things have been good for Gildan since it picked up American Apparel, HanesBrands has a new growth initiative, Zumiez saw a sales uptick, and things aren’t going to well for Welspun.

Gildan

Gildan Activewear Inc. achieved strong gains in sales and earnings for the first quarter ended April 2, as it integrates recent acquisitions of Alstyle, Peds and American Apparel.

The vertically integrated apparel manufacturer, headquartered in Montreal, achieved a 24 percent increase in net earnings to $83.5 million, or 36 cents per share, in the quarter compared with net earnings of $63.2 million, or 26 cents a share for the three months ended April 3, 2016.

Net sales grew 12.2% in the quarter to $665.4 million, driven by acquisitions and organic growth. Sales growth and operating margin expansion translated to strong adjusted diluted earnings per share growth of 39 percent compared to the year-ago period.

Gildan said increased market share in men’s underwear in the retail channel and continued growth in the faster growing product categories of Printwear reflected continued progress with its strategic initiatives, despite mixed market conditions.

HanesBrands

HanesBrands launched a multiyear initiative to increase investment for growth, reduce costs and drive cash flow as it reported mixed financial results for the first quarter ended April 1.

The growth initiative, called Project Booster, is expected to drive the company’s Sell More, Spend Less, Generate Cash business strategy. By 2020, the effort is expected to generate about $300 million of incremental annual net cash from operations and $100 million in annualized net cost savings after annualized growth reinvestment of $50 million.

In the quarter, net sales increased 13 percent to $1.38 billion on acquisition contributions such as Champion Europe, unifying the Champion brand globally.

First quarter operating profit fell 1 percent to $121 million and earnings per share fell 10 percent to 19 cents. Excluding pretax charges related to acquisition integrations, adjusted operating profit rose 9 percent to $160 million and adjusted EPS increased 12 percent to 29 cents.

Welspun

Welspun India Ltd., part of the $2.3 billion U.S.-based Welspun Group, posted a 23 percent drop in consolidated net profit to $24 million for the quarter ended March 31, compared to $31.1 million in the year-ago quarter.

Income increased by 8.1% to $276.10 million during the quarter from $253.7 million in the year-ago period.

B.K. Goenka, chairman of Welspun Group, a home textiles specialist, said, “We have raised the bar with regard to traceability, sustainability, inclusive growth, innovation and branding, while maintaining our momentum for growth and efficiency. The industry is facing significant head winds in terms of raw material.”

Zumiez

Specialty retailer Zumiez Inc. said Wednesday that net sales for the four-week period ended April 29 increased 10.3% to $56.5 million compared to $51.2 million for the four-week period ended April 30, 2016. The company’s comparable sales increased 7.8% for the four-week period compared to a comparable sales decrease of 6 percent in the year ago period.

Based primarily on a higher than expected tax rate, Zumiez expects first quarter 2017 net loss per share to be toward the low end of its guidance range of  17 cents to 21 cents.

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