Gildan Tumbles Most Since May on Profit ForecastEric Lam
Gildan Activewear Inc., the top-performing company in the benchmark Standard & Poor’s/TSX Composite Index in 2012, fell the most in nine months after forecasting second-quarter earnings below analysts’ estimates.
Gildan sank 4.2 percent to C$35.03 in Toronto, the most since May 3. Gildan, based in Montreal, has risen 66 percent in the past 12 months.
The company, one of the world’s biggest suppliers of t-shirs to makers of printed clothing, is forecasting adjusted earnings of 54 to 57 cents a share, short of the 58-cent average of 14 estimates compiled by Bloomberg.
The company said the second quarter will be affected by lower net selling prices for its printwear business, short-term manufacturing inefficiencies, the timing of the Easter holiday shutdown, and some cost inflation.
“The cost of cotton futures has increased since the company initiated its fiscal 2013 guidance in November,” Gildan said in a statement. “The company has not yet purchased all of its cotton requirements for consumption in cost of sales in the balance of fiscal 2013.”
It assumes it will be able to buy the balance of its cotton at approximately current prices, the company said.
Gildan reported profit of $35.3 million, or 29 cents a share, in the first quarter ended Dec. 30, compared with a net loss of $46.1 million, or 38 cents a share a year earlier. Profit was 32 cents a share adjusted for certain items, ahead of expectations of 30 cents according to the average estimate of 15 analysts surveyed by Bloomberg.