=Gildan Activewear (GIL) reported earnings on Thur 23 Feb 17 (b/o)

Gildan Activewear beats by $0.03, misses on revs; guides FY17 EPS below consensus; raises dividend 20%; approves buyback up 5% of shares; Board approves new shareholder rights plan:

• Reports Q4 (Dec) earnings of $0.32 per share, $0.03 better than the Capital IQ Consensus of $0.29; revenues rose 8.1% year/year to $587.9 mln vs the $604.14 mln Capital IQ Consensus, reflected sales increases of 14.4% in the Printwear segment and 1.2% in Branded Apparel. Growth was primarily driven by the impact of the Alstyle and Peds acquisitions and organic unit sales volume growth in Printwear, partly offset by the impact of significant retailer inventory destocking and the anticipated impact of the exit of private label programs in Branded Apparel, as well as lower net selling prices in Printwear. The acquisitions of Alstyle and Peds contributed ~$50 million in sales in the fourth quarter of 2016.
• Consolidated gross margin in the fourth quarter of 2016 was 26.7%, in line with the same period last year, as the benefits from lower raw material and other input costs were largely offset by lower net selling prices.
• Co issues downside guidance for FY17, sees EPS of $1.60-1.70 vs. $1.72 Capital IQ Consensus on projected high single digit consolidated net sales growth. Adjusted EBITDA for 2017 is expected to be in the range of $555 to $585 million. The Company is also projecting another record year of strong free cash flow generation in excess of $400 million. Net sales in 2017 in the Printwear and Branded Apparel segments are each expected to increase in the high single digit range.
• The Board of Directors has approved a 20% increase in the amount of the current quarterly dividend and has declared a cash dividend of $0.0935 per share, payable on April 3, 2017 to shareholders of record on March 9, 2017.
• Co announced that it had received approval from the Toronto Stock Exchange for a new normal course issuer bid commencing on February 27, 2017 to purchase for cancellation up to 11,512,267 common shares, representing ~5% of the Company's issued and outstanding common shares. As of February 17, 2017, the Company had 230,245,359 common shares issued and outstanding.
• Co also announced that its Board of Directors has approved a new shareholder rights plan which will become effective upon confirmation and approval by the shareholders of the Company at the annual meeting of shareholders to be held on May 4, 2017. The Rights Plan will ensure that the Company and its shareholders continue to receive the benefits associated with the Company's current shareholder rights plan, which is due to expire at the close of business on the date of the Company's upcoming annual meeting of shareholders.