MONTREAL — Gildan Activewear Inc. expects sales of the American Apparel brand it acquired last year will double in 2018 as it looks to expand sales of the product globally.
The Montreal-based maker of apparel, including T-shirts, socks and underwear says the iconic brand it acquired last February should add about US$100 million of net sales this year, up from US$50 million in 2017.
Gildan bought the bankrupt California brand for US$88 million in a deal that excluded American Apparel stores and its e-commerce site.
It subsequently decided to use Gildan’s low-cost global production networks to expand its offering while also making some lines of American Apparel in the United States.
Gildan, which reports in U.S. dollars, says its overall net profit decreased 26 per cent to $54.9 million in the fourth quarter.
Excluding restructuring and acquisition-related costs, it earned $67.6 million or 31 cents per diluted share. That matched analyst forecasts but was down from $74.5 million or 32 cents per share in the prior year.
Revenues increased 11 per cent to $653.7 million for the period ended Dec. 31.
Gildan was expected to post $634.6 million in revenues, according to analysts polled in Thomson Reuters.
The growth in revenues reflected a nearly 28 per cent increase in printwear sales to $415.6 million, including US$16.6 million from sales of American Apparel.
Net sales of Gildan-branded clothes such as underwear fell 9.2 per cent to $238.1 million.
For the full year, Gildan earned $362.3 million or $1.61 per diluted share, compared to $346.6 million or $1.47 per share in 2016.
Adjusted earnings grew 8.6 per cent to $386.9 million. That equalled $1.72 per share, up from $1.51 a year ago.
Revenues were $2.75 billion, up from $2.59 billion in 2016.
Gildan says it expects to earn $1.80 to $1.90 in adjusted diluted earnings in 2018 on low to about five per cent higher revenues.
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Companies in this story: (TSX:GIL)
Ross Marowits, The Canadian Press