Gildan Activewear (GIL) Q1 2026 earnings summary

Executive summary

• Record Q1 net sales reached $1.17 billion, up 63.8% year-over-year, driven by the HanesBrands acquisition and higher retail prices, despite integration costs and inventory reduction impacting volumes.

• Adjusted diluted EPS from continuing operations was $0.43, down 27.1% year-over-year, reflecting short-term integration impacts and $106 million inventory step-up charges.

• Integration of HanesBrands is progressing as planned, with synergy targets of $100 million for 2026 and $250 million annual run-rate over three years.

• Market share gains achieved in both wholesale and retail channels, with strong performance in premium and underwear categories.

• Maintained full-year 2026 guidance and three-year objectives for 2026–2028.

Financial highlights

• Net sales from continuing operations were $1.17 billion, up 63.8% year-over-year, in line with guidance.

• Adjusted operating income increased 23.1% to $167 million; adjusted operating margin was 14.3%, down 470 bps year-over-year.

• Adjusted gross profit was $385 million (33% of net sales), up from 31.2% last year, after excluding a $106 million inventory step-up charge.

• GAAP diluted loss per share was $0.30; adjusted diluted EPS was $0.43, down 27.1% year-over-year.

• Free cash flow was negative $310 million, reflecting lower net earnings and higher working capital needs.

Outlook and guidance

• 2026 revenue guidance maintained at $6.0–$6.2 billion; adjusted operating margin expected at ~20%.

• Adjusted diluted EPS for 2026 projected at $4.20–$4.40, up 20–25% year-over-year.

• Free cash flow for 2026 expected to exceed $850 million; CapEx to be ~3% of net sales.

• Q2 2026 net sales expected at ~$1.6 billion, with adjusted operating margin around 19.7%.

• No share repurchases planned until net debt leverage ratio returns to 1.5–2.5x.