Gildan Reports Q1 Loss, Lower Adjusted EPS Post-HanesBrands Acquisition, Maintains Full-Year Guidance
Summary
Gildan reported a Q1 GAAP loss and lower adjusted EPS, despite record revenue driven by the HanesBrands acquisition, but maintained its full-year 2026 guidance and synergy targets.
Key Events
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Reports Q1 2026 Financial Results
Net sales from continuing operations reached $1.17 billion, up 63.8% year-over-year, primarily due to the HanesBrands acquisition. However, the company reported a GAAP diluted loss per share of $0.30, compared to earnings of $0.56 in the prior year. Adjusted diluted EPS from continuing operations declined 27.1% to $0.43.
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Operating Margins Decline
Operating margin was (0.1)%, down from 18.2% in Q1 2025. Adjusted operating margin decreased to 14.3% from 19.0% in the prior year, reflecting the impact of the HanesBrands acquisition and its historically higher SG&A levels.
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Maintains Full-Year 2026 Guidance
Despite the Q1 performance, Gildan maintained its full-year 2026 guidance, including revenue of $6.0 billion to $6.2 billion, adjusted operating margin of approximately 20%, and adjusted diluted EPS in the range of $4.20 to $4.40.
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HanesBrands Integration Progressing
The integration of HanesBrands is on track to generate approximately $100 million in synergies for 2026, with an expectation of $250 million in annual run-rate cost synergies over the next three years.
Analysis
Gildan Activewear Inc. reported its first full quarter results consolidating the HanesBrands acquisition, showing a GAAP diluted loss per share and a decline in adjusted diluted EPS compared to the prior year. While net sales saw a significant increase due to the acquisition, operating margins decreased, and the company continued to experience negative free cash flow. The leverage ratio remains above the target, keeping share repurchases paused. However, management maintained its full-year 2026 guidance, signaling confidence in achieving its financial objectives and synergy targets from the HanesBrands integration, which is progressing as planned. Investors will likely focus on the company's ability to improve profitability and cash flow in subsequent quarters to meet its maintained guidance.
At the time of this filing, GIL was trading at $57.00 on NYSE in the Manufacturing sector, with a market capitalization of approximately $10.4B. The 52-week trading range was $41.61 to $73.70. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.