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On the Way to World Domination, Interim 3rd Qtr Gildan Report

By Rick Roth

Big Picture

Gildan had a record-breaking third quarter. Sales, profit margins, and earnings per share were all very strong, even as the economy and apparel demand were “uneven.” The company also reaffirmed plans to merge with HanesBrands, which should close late 2025 or early 2026. You can read the report itself in all its glorious financial report gibberish here.

Financial Overview

  • Sales: $911 million (up 2.2% from last year).

    • Activewear (like blank tees and hoodies) did best — up 5.4%.

    • Hosiery and underwear were weaker – down 22%. A big competitor in this area has been Hanes so look for this to be a rosier picture in a couple of years.

    • International sales dipped 6%.

  • Profitability: They made $307 million gross profit, or 33.7% of sales, mainly because manufacturing costs dropped and price increases stuck.

  • Operating profit: $192 million (21.1% margin). If you ignore one-time costs like merger fees, it’s $212 million (23.2% margin) — a record.

  • Earnings per share: Officially $0.80; after adjusting for those one-time costs, $1.00 – a 17% increase from last year.

Year-to-Date (Jan–Sept 2025)

  • Total sales: $2.54 billion (up 3.7%).

  • Operating profit: $521 million (20.5% margin).

  • Adjusted operating profit: $556 million (21.9% margin).

  • Adjusted earnings per share: $2.55, up from $2.18 last year.

  • Free cash flow: $189 million after investments and dividends.

  • Share buybacks: They bought back 3.8 million shares earlier in the year but have paused buybacks due to the HanesBrands deal. Just fyi, buying back shares enriches the shareholders, less shares makes them worth more. Its like giving the more capital instead of giving them dividends, i.e. cash.

Merger with HanesBrands

  • Announced August 2025.

  • Each HanesBrands shareholder gets 0.102 Gildan shares + $0.80 cash per share.

  • Total value: about $4.4 billion (including debt). That’s quite a Holiday gift buying spree.

  • Expected to close late 2025 or early 2026 once shareholders and regulators approve. “Regulators”? I think they were all “Doged” I would say that is the crux of why this is happening now.

  • Gildan raised $1.2 billion in bonds to help fund it.

Outlook for 2025

  • Sales: Expected to rise by mid-single digits (roughly 5%).

  • Adjusted operating margin: About 0.7 percentage points higher than 2024.

  • Capital spending (CapEx): 4% of sales (less than planned).

  • Adjusted earnings per share: $3.45 – $3.51 (up 15–17% vs 2024).

  • Free cash flow: Around $400 million (a bit lower than earlier estimates).

  • Assumes tariffs and inflation stay roughly as they are, and no major global disruptions. Which of course is quite an assumption with King Tariff meddling with the world economy.

ESG & Corporate Highlights

  • Named one of Canada’s 50 Best Corporate Citizens (for the 4th year). Their criteria are here.  Apparently their doing a whole lot of their business in the tax haven of Barbados isn’t a deal breaker on that.

  • Included again on TIME’s World’s Most Sustainable Companies list. Ink Kitchen comment: Here is Time’s methadology.

  • Declared a dividend of $0.226 per share to be paid Dec 15 2025.

  • No more share buybacks until debt levels come back to their preferred range.

and in Conclusion
Gildan had a strong quarter thanks to solid sales of its core Activewear, good cost control, and higher prices. Its profit margins hit record levels. The company is preparing to merge with HanesBrands, which will make it one of the largest basic-apparel producers in the world. Some other superlative is needed for that probably since they already were on of the biggest in the world. Not mentioned in the report were that they did not have a presence at the Dallas Impressions show or at Printing United. Perhaps they are getting big enough that they don’t even need to promote their brands.

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