July 31 (Bloomberg) -- Gildan Activewear Inc., the Canadian producer of T-shirts and underwear, posted its biggest decline in eight months after cutting its profit forecast for the year.
Gildan lowered its estimate for adjusted earnings to $3 to $3.03 per share, from the previous range of $3-$3.10. This is below the average analyst estimate of $3.08 a share, according to data compiled by Bloomberg.
The Montreal-based company has struggled to meet customer demand this quarter because it lacked the inventory to fill its orders. In an analyst call today, Gildan said it lost sales due to the lack of stock.
“They couldn’t meet demand on the retail side,” Brian Yarbrough, an analyst for Edward Jones & Co., said in a phone interview. “So I think you’ll hear people say ‘Oh does that mean retailers won’t come back to them or retailers won’t trust them in the future?’”
Gildan fell 3.4 percent to C$63.89, the biggest one-day drop since February 2013. The stock has rallied 13 percent this year.
Gildan bought Doris Inc., North America’s third-largest marketer of branded ladies legwear, on July 7 and announced in today’s report it will be opening a new textile facility in its Rio Nance, Honduras facility to support sales growth in 2016.
Gildan reported third-quarter net sales of $693.8 million, up 13 percent from $614.3 million for the same quarter last year. Net income was little changed at $116 million, or 94 cents a share.
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