Gildan Gears Up to Report Q4 Earnings: Here's What to Expect

Core Viewpoint - Gildan Activewear Inc. is set to release its fourth-quarter 2024 results, with expectations of revenue growth and stable earnings per share, driven by strategic initiatives and market demand [1][3][5]. Group 1: Financial Expectations - The Zacks Consensus Estimate for revenues is $793.5 million, reflecting a 1.4% increase from the previous year [1]. - The consensus estimate for earnings per share is stable at 80 cents, indicating a 6.7% increase from the year-ago period [1]. - Gildan has a trailing four-quarter earnings surprise average of 5.4% [1]. Group 2: Strategic Initiatives - Gildan's Sustainable Growth Strategy focuses on capacity expansion, innovation, and ESG initiatives, which are expected to enhance competitive strength and profitability [3]. - The new manufacturing complex in Bangladesh is projected to reach a 75% exit capacity rate by year-end, improving supply chain efficiencies [4]. - Ongoing modernization of yarn operations in the U.S. is driving operational improvements, likely benefiting the upcoming quarter [4]. Group 3: Market Dynamics - The company is expected to benefit from lower raw material and manufacturing input costs, which should enhance margins [5]. - The Activewear segment is gaining momentum due to market share expansion and strong demand for new soft cotton technology products [5]. - Increased international sales, particularly in Europe, are anticipated to positively impact revenue, driven by inventory replenishment and improved distribution capabilities [5]. Group 4: Management Outlook - Management has refined its outlook, expecting low-single-digit revenue growth, with mid-single-digit growth anticipated when excluding the impact of the Under Armour sock license expiration [6]. - Adjusted operating margin is projected to be slightly above 21%, with positive POS trends expected to continue through the final quarter [6]. Group 5: Stock Performance and Valuation - Gildan's stock has increased by 47.1% over the past year, outperforming the broader industry decline of 2.9% and the Consumer Discretionary sector's growth of 15.7% [8]. - The stock is trading at a forward 12-month price-to-earnings ratio of 14.81x, below its five-year high of 15.82x and the industry's average of 22.45x, indicating attractive valuation for investors [10].