Gildan Activewear (GIL) reports downside prelim Q3 results and cuts FY19 guidance

• Earnings: Oct 31 b/o

** charts after guidance **

 

Gildan Activewear reports downside prelim Q3 results and cuts FY19 guidance

Co sees Q3 (Sep) EPS of ~$0.53, excluding items, vs. $0.57 S&P Capital IQ Consensus; sees Q3 (Sep) revs of ~$740 mln vs. $790.67 mln S&P Capital IQ Consensus. The previous guidance provided on August 1, 2019 called for adjusted diluted EPS growth to be flat in the third quarter, on projected sales growth in the mid-single-digit range over the third quarter last year. During the third quarter of 2019, co experienced significantly weaker than expected demand for imprintables in North America and ongoing softness in international imprintable markets. Specifically in the U.S. imprintables channel, where the co was expecting low-single-digit growth in distributor point-of-sales (POS), actual POS during the third quarter was down high-single-digits compared to last year. Further, in international imprintable markets where the Company was forecasting growth, continued softness in Europe and China resulted in lower international sales for the quarter compared to last year. While overall imprintable sales were weaker than expected, overall retail sales were essentially in line with co's expectations.

Company is revising its 2019 guidance to reflect the approximate $50 million sales shortfall in the third quarter and is assuming the current demand weakness for imprintables both in North America and internationally will persist through the fourth quarter.... sees FY19 (Dec) EPS of $1.65-1.70, prior $1.95-2.00, excluding non-recurring items, vs. $1.97 S&P Capital IQ Consensus; Adjusted EBITDA of $545 to $555 million, compared to previous guidance of in excess of $615 million; and free cash flow for 2019 of $200 to $250 million compared to previous guidance of $300 to $350 million