MONTREAL - Gildan Activewear (TSX:GIL) Inc . (NYSE:GIL; TSX and NYSE), a leading apparel manufacturer, today reaffirmed its full-year guidance for 2024 and disclosed preliminary revenue for the first quarter. Vince Tyra, President and CEO of Gildan, shared the company's strategic priorities, focusing on growth, innovation, and environmental, social, and governance (ESG) initiatives.
These priorities aim to leverage Gildan's brand strength and supply chain initiatives to maintain industry-leading margins and accelerate value creation for stakeholders.
Gildan anticipates its preliminary Q1 2024 net sales to be around $695 million, marking a slight decrease of approximately 1% from the previous year. Despite this, the company maintains its forecast for the full year, expecting revenue growth to be flat to up low-single digits and an adjusted operating margin slightly above the high end of the 18% to 20% annual target range.
Adjusted diluted earnings per share (EPS) for 2024 are projected to range from $2.92 to $3.07, representing a significant increase of 13.5% to 19.5% year over year.
Looking ahead to the medium term, from 2025 to 2028, Gildan is confident that its strategic priorities will enable continued market share gains and opportunities in targeted markets. The company targets net sales growth at a compound annual growth rate in the mid-single digits range, with an annual adjusted operating margin between 18% and 21%.
Capital expenditures are expected to average about 5% of sales per year to support long-term growth and vertical integration, with adjusted diluted EPS growth per annum in the high-single to low double-digit range.
Gildan's capital allocation priorities remain focused on annual dividend growth, share repurchases within a leverage framework of 1.5x to 2x, and value-accretive mergers and acquisitions. These strategies are anticipated to yield strong shareholder returns.
The company's outlook and medium-term targets are based on current market conditions, including the pricing and inflationary environment, and do not account for any significant deterioration in geopolitical situations. They also incorporate the estimated impact of the implementation of draft Global Minimum Tax legislation in Canada and Barbados on Gildan's effective tax rate, retroactive to January 1, 2024.
The information in this article is based on a press release statement from Gildan Activewear Inc .
InvestingPro Insights
Gildan Activewear Inc. (GIL) has been navigating the market with strategic precision, as evidenced by its management's confidence in maintaining its full-year guidance for 2024. The company's commitment to shareholder value is reflected in its consistent dividend growth, with dividends raised for three consecutive years, and a notable dividend yield of 2.25% as of the first quarter of 2024.
This commitment is further underscored by a track record of maintaining dividend payments for 14 consecutive years. PRONEWS24 can be used to unlock more insights and obtain an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
On the financial front, Gildan boasts a market capitalization of $5.96 billion, indicating its substantial presence in the apparel industry. The company's P/E ratio stands at 11.6, offering an interesting point of comparison to its near-term earnings growth.
Moreover, with a P/E ratio adjusted for the last twelve months as of Q4 2023 at 13.33, Gildan's valuation metrics can be a significant factor for investors considering the stock's future trajectory.
The company's strategic focus on innovation and ESG initiatives, along with its strong return over the last three months, which saw a price total return of 16.6%, aligns with the upward momentum observed in its stock price, which has experienced a large uptick over the last six months.
Investors should note that while analysts have revised their earnings downwards for the upcoming period, Gildan's performance over the last twelve months has been profitable, and analysts predict the company will continue to be profitable this year.
These insights, coupled with the fact that Gildan operates with a moderate level of debt and its liquid assets exceed short term obligations, provide a nuanced view of the company's financial health. For those seeking additional InvestingPro Tips, there are more available to help refine investment decisions related to Gildan Activewear Inc.
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